Answer to Question #207849 in Microeconomics for Qiniso

Question

The market for fast food chicken restaurants, like KFC, Chicken Licken and Nandos, are said to be within the category of monopolistic competition. Examine this market for characteristics and behaviours that link them to this type of market structure.

Answer 1

In economics Monopolistic competition is a type of market that involves many companies in an industry and they sell similar but differentiated products.With reference to monopolistic competition, KFC,Chicken Liken and Nandos are all fast food restaurants that deal in similar product in the form of chicken.Another characteristic that link this three restaurants is that they have so many buyers but they are independent in making their own prices.Lastly the three restaurants deal in the same product but have certain imaginary product differences in terms of how they advertise the products.They also have different trademarks for example their logos are differen hence they belong to monopolistic market .