Competition can be described and classified as monopolies, oligopolies, pure competition or as monopolistic competition. When it comes to how companies compete under these different situations, the following is true:

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The question asks about how competition differs across market structures and how firms compete under those conditions. 
Option A: 'In pure competition, products compete on price; in monopolistic competition, products compete product features and on price' This aligns with economic theory: in pure (perfect) competition, firms sell homogeneous products and cannot differentiate by features, so the primary competitive lever is price. In monopolistic competition, products are differentiated (by features, branding, quality, etc.), so firms compete on product features as well as price. This option captures the essence of both market structures. 
Option B: 'In pure competition, products compete on price and product features; in monopolistic competition, products compete on price' Pure competition involves homogeneous products, so product features are not a basis for competition; pricing alone does not reflect product differentiation. In monopolistic competition, while price is a factor, competition also hinges on differentiation (features, quality, branding). This option overstates product feature competition in pure competition and understates differentiation in monopolistic competition. 
Option C: 'In pure competition, products compete on price; in monopolistic competition, products compete on product features' This states that monopolistic competition excludes price from competition, which is incorrect. Price still plays a role alongside differentiation in monopolistic competition, so leaving out price is misleading. 
Option D: 'In pure competition, products compete on product features; in monopolistic competition, products compete on price' This reverses the actual emphasis. In pure competition, products are homogeneous, so features do not drive competition; price is the main mechanism. Monopolistic competition does involve price competition but is characterized by product differentiation, not exclusively price-focused competition. 
Overall, the reasoning shows that each option has conceptual flaws except the first, which correctly distinguishes price-focused competition in pure competition and feature/ differentiation-driven competition in monopolistic competition.

COMM_V 296 103 104 2025W1 2025W1 COMM 296 Final Exam - December 15- Requires Respondus LockDown Browser

Competition can be described and classified as monopolies, oligopolies, pure competition or as monopolistic competition. When it comes to how companies compete under these different situations, the following is true:

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COMM_V 296 103 104 2025W1 2025W1 COMM 296 Final Exam - December 15- Requires Respondus LockDown Browser

Competition can be described and classified as monopolies, oligopolies, pure competition or as monopolistic competition. When it comes to how companies compete under these different situations, the following is true:

View Explanation

Log in for full answers

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