ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The price will decrease because the new provider wants to keep its customers happy.
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The price will increase because there is only one internet provider in Utopia.
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The price will decrease because there is only internet provider in Utopia.
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There will be no change in price.
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Detailed explanation-1: -Under which market structure is a firm highly concerned with cost and customers, but not so concerned with competition? Perfect Competition.
Detailed explanation-2: -Monopoly occurs when only one firm sells the product or service. There is only one seller in these markets for a product with no close substitutes. If consumers are interested in this product, there is no other seller providing this good or a substitute good. Examples are water, electricity, and most utility services.
Detailed explanation-3: -An oligopoly will allow more than one honcho to co-exist, and a monopolistic competition will allow several players to enter into the market, while a monopoly will essentially be the one that stands apart and rules the entire demand and supply chain in the particular field of selection.
Detailed explanation-4: -In monopolistic competition, supply and demand forces do not dictate pricing. Firms are selling similar, yet distinct products, so firms determine the pricing. Product differentiation is the key feature of monopolistic competition, where products are marketed by quality or brand.