Question

Assertion (A): Toothpaste is an example of monopolistic competition.

Reason (R): The different brands of toothpaste are similar but slightly differentiated in terms of taste and flavours.

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true but Reason (R) is false.

• Assertion (A) is false but Reason (R) is true.

Answer 1

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Explanation:

Toothpaste markets are perfect instances of monopolistic competition since several sellers provide near substitutes that compete through product differentiation. Brands build strong consumer loyalty through distinct tastes, flavours, and packaging, allowing each manufacturer to have some pricing power despite delivering a fundamentally similar product.