ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Perfect Competition
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Pure Monopoly
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Monopolistic Competition
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Oligopoly
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Detailed explanation-1: -Companies in monopolistic competition act as price makers and set prices for goods and services. Firms in monopolistic competition can raise or lower prices without inciting a price war, often found in oligopolies.
Detailed explanation-2: -Since in Monopolistic Competition, products are close substitutes of each other, they have high positive cross-elasticities. The market for the product of one firm is not separate from the markets of its rival firms.
Detailed explanation-3: -A local telephone company B. An automobile manufacturer C. A restaurant D. All of the above are likely to be monopolistic competitors.
Detailed explanation-4: -An oligopoly refers to a market with only a few sellers. Monopolistic competition refers to situations where there are many sellers, but the products are highly differentiated. There are several important nuances to explore between these types of markets.