"If not, that sounds like a dysfunctional market." No, it is not a dysfunctional market. People are perfectly willing to pay more for the perception of increas

"If not, that sounds like a dysfunctional market." No, it is not a dysfunctional market. People are perfectly willing to pay more for the perception of increased quality. In terms of classification, this means that the firms in the market are in monopolistic competition. Here is a halfway decent Wikipedia page on the topic: http://en.wikipedia.org/wiki/Monopolistic_competition http://en.wikipedia.org/wiki/Monopolistic_competition