Answer to Question #129581 in Microeconomics for Mcedisi

Question

Identify any five examples of industries operating under conditions of monopolistic competition and outline any of their salient features to justify your selection.

Answer 1

Examples of industries that operate under monopolistic competition include Hotels and Pubs, Taxis service industry, Hairdressing, Clothing business, and Restaurant business.

The reason why they have a monopolistic competition is because of the features they have, which are listed below:

·        A large number of buyers and sellers.

·        Existence of low barriers to entry and exit.

·        Availability of slightly differentiated products.

·        Imperfect information.

·        Ability to have supernormal profits in the short term.