What market structure is characterized by many sellers with differentiated products?

The market structure characterized by many sellers offering differentiated products is indeed monopolistic competition. In this type of market, numerous firms compete against each other, but each one offers a product that is slightly different from the others. This differentiation can stem from various factors such as quality, features, branding, or customer service.

Firms in monopolistic competition have some degree of market power because the products are not perfect substitutes for one another. As a result, they can set prices above marginal cost, unlike in pure competition, where products are homogeneous, and firms are price takers. Monopolistic competition allows for both competition and a certain degree of market influence by individual firms, leading to product variety and innovation.

Pure competition, on the other hand, involves many sellers offering identical products, making it impossible for any single firm to influence market prices. In a monopoly, there is only one seller for a unique product, giving complete market control without competition. An oligopoly features a few sellers who may offer either similar or differentiated products, but the key factor is the limited number of firms rather than the variety of products, which is characteristic of monopolistic competition.