CMA Foundation · Fundamentals of Business Economics and Management · Forms of Market
Which of the following is a typical example of non-price competition in monopolistic competition?
A toothpaste brand changing packaging and running a brand campaign is non-price competition. It tries to win customers through differentiation, branding and advertising rather than by changing price, which is common in monopolistic competition where products are close but not identical substitutes.
- ATwo petrol pumps charging the same government-fixed price
- BA farmer selling wheat at the mandi price
- CA restaurant cutting prices after an agreement with rivals
- DA toothpaste brand changing packaging and running a brand campaign to distinguish itselfCorrect
Explanation
Non-price competition relies on product differentiation, branding, packaging, quality and advertising rather than price changes. The wheat and fixed-price cases lack this feature, and a price cut by agreement is collusion, not non-price competition.
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