Question

Restaurant owners and cable operators face which type of market structure

Answer 1

Restaurant owners and cable operators face monopolistic competition.

The market structure in which there are many firms which offer similar products and services but they are not perfect substitutes. The barriers for entry and exit in the industry are low. The decisions of one firm does not affect its competitors directly.

The firms have the same market power. All of them are price makers. The demand is highly elastic in the long run. This means that demand is sensitive to price changes. Economic profit is positive in the short run. In monopolistic competiton the firms advertise heavily.

Answer 2

The answer is monopolistic competition.

Restaurant owners and cable operators face monopolistic competition type of market structure.

In monopolistic competition, producers sell products which are different from each other in terms of various characteristics such as quality, branding and so on. This is essentially an imperfect competition with no specific business having a complete control over the market place.