Read the following statements - Assertion (A) and Reasoning (R).
Assertion: The industries today are moving towards being monopolistically competitive.
Reasoning: Number of firms dealing in close substitutes within an industry is increasing, leading to fierce competition.
Answer & explanation
Correct answer: option 1
Yes, we are operating in an era of monopolistic competition. Majority of industries are operating under this form of market and there is a rise in this trend. The reason being the rise of new entrepreneurs providing better close substitutes than their competitors.