The correct answer is: C. large number of producers with product differentiation.
Monopolistic competition is a market structure in which there are a large number of firms selling products that are similar but not identical. This means that each firm has some degree of market power, but not as much as a monopolist. Firms in monopolistic competition compete on price, product quality, and marketing.
Option A is incorrect because it describes a perfectly competitive market. In a perfectly competitive market, there are a large number of firms selling identical products. This means that firms have no market power and must compete on price alone.
Option B is incorrect because it describes a monopoly. In a monopoly, there is only one firm selling a good or service. This means that the firm has a great deal of market power and can charge a high price.
Option D is incorrect because it describes an oligopoly. In an oligopoly, there are a small number of firms selling a good or service. This means that firms have some market power, but not as much as a monopolist. Firms in an oligopoly often compete on price, product quality, and marketing.