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Economics miscellaneous

  1. The sale of branded articles is common in a situation of
    1. excess capacity
    2. monopolistic competition
    3. monopoly
    4. pure competition
Correct Option: B

Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes. Textbook examples of industries with market structures similar to monopolistic competition include restaurants, cereal, clothing, shoes, and service industries in large cities.



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