Is a frosted flake a frosted flake or do real product differ

•Is a frosted flake a frosted flake, or do real product differences exist

Solution

In a market with numerous buyers and sellers where each seller offers a similar but slightly differentiated product, the market structure is termed Monopolistic Competition. In such market, each individual seller attempts to differentiate its goods from other goods in terms of packaging, branding, quality, after-sale support, advertising, etc. Therefore, firms often name their product to differentiate itself from other similar products being sold. So a name may not be an exact indicator of the good being sold.

So, naming a cereal Frosted Flake doesn\'t make the cornflakes exactly frosted. This naming is done only as a differentiator (generating interest among consumer goods about the good) from other goods.