Keely says that he's glad that his morning coffee is sold in a monopolistically competitive market rather than a purely competitive market. If this is true for most things Keely buys, it suggests that he

A) is most concerned about paying the lowest price possible.
B) cares most about allocative efficiency.
C) is willing to pay extra for product variety.
D) is a creature of habit who always buys the same type of a particular good.

Question

Ricky Frazier, Jr. · Accepted Answer

Final Answer : C, Explanation :  Monopolistic competition is characterized by many firms offering differentiated products, which leads to a variety of choices for consumers. Keely's preference for this market structure over a purely competitive one, where products are homogeneous and there is no product differentiation, suggests he values the diversity of options and is willing to pay more for the uniqueness or specific traits of his morning coffee, rather than just seeking the lowest price or being solely concerned with efficiency.

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