Monopolistic Competition

In Melbourne, in 2024, there were over 2,000 independent specialty coffee shops within a 30-minute drive of the Central Business District. Each one served espresso, milk and water, through some combination of imported beans, a barista and a sound system. None of them had a meaningful price advantage over the next. A flat white at the cafe across the street cost $5 exactly. The differences were never about price, the differences were everything else. Patricia had the queue out the door, the standing room only counter, and the specific Tetsuya Nakajima ceramic that you saw in your friend's Instagram story. The third shop had the friendly barista who remembered your order. Each cafe had a tiny slice of the market that nobody else could reach, because nobody else was that exact place with that exact bean and that exact barista.