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An industry consists of 100 small firms, and the largest firm accounts for only 2 percent of sales. Brand names are considered a signal of quality. The industry described is best classified as

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Answer:

Monopolistically competitive

Explanation:

Based on the information given the industry described is best classified as MONOPOLISTICALLY COMPETITIVE reason been in a Monopolistic competitive market their are competition among many manufacturer of product in which the products this manufacturer sell are different from each other .

Secondly the products are not similar or identical product reason been that their customer can easily differentiate between the goods or product that meet the same need of the product they want.

Therefore an industry or firm which consists of 100 small firms in which the largest firm can only accounts for 2% of sales while the Brand names on the other hand are considered to be a signal of quality is what is classified as MONOPOLISTICALLY COMPETITIVE market.

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