Which market structure allows buyers to have some control over the price due to product differentiation?

Monopolistic competition is characterized by a market structure where there are many firms competing against each other, but each firm offers a product that is differentiated from others. This differentiation can be based on features, quality, branding, or other factors that make a product distinct in the eyes of consumers.

Because of this differentiation, buyers are not merely price takers, as they would be in a pure competition scenario. Instead, they have some degree of control over the price they are willing to pay because they value the unique aspects of the product they are purchasing. For example, if a consumer prefers a particular brand of shoes over another, they may be willing to pay a higher price for those shoes due to perceived quality or brand loyalty.

In contrast, in pure competition, all firms sell identical products, and buyers do not have any control over prices as they are set by the market. In an oligopoly, while firms may produce differentiated products, the market dynamics are significantly influenced by the few firms present, leading to strategic behavior that can complicate price control. Lastly, a monopoly involves a single firm controlling the entire market without competition, eliminating any buyer influence on pricing.

Therefore, the presence of product differentiation in monopolistic competition allows buyers to exercise some control