ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The market structure of lodging industry is ‘Monopolistic competition’-market structures in which there are many firms selling differentiated products, there are few barriers to entry.

Detailed explanation-2: -Hotels: Hotels offer a prime example of monopolistic competition. Each hotel company offers a similar service with slight variations in pricing and quality levels.

Detailed explanation-3: -Conclusion – Hotel industry is a typical oligopolistic industry. Once again in the conclusion part if we go through the definition of Oligopoly that clearly states that Oligopoly is a market with a small number of large players, hotel industry is an industry with a small number of large players.

Detailed explanation-4: -Monopolistic competition exists when many companies offer competitive products or services that are similar, but not exact, substitutes. Hair salons and clothing are examples of industries with monopolistic competition.

Detailed explanation-5: -However, Hotel industry can never be classified under monopoly and perfect competition markets. This is because, in a perfectly competitive market, it involves a 6 MARKET STRUCTURES large number of well-informed buyers and sellers.