ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A monopoly
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Monopolistic Competition
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Perfect Competition
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Oligopoly
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Detailed explanation-1: -Natural gas, electricity companies, and other utility companies are examples of natural monopolies. They exist as monopolies because the cost to enter the industry is high and new entrants are unable to provide the same services at lower prices and in quantities comparable to the existing firm.
Detailed explanation-2: -Public utilities: gas, electric, water, cable TV, and local telephone service companies, are often pure monopolies.
Detailed explanation-3: -Some examples of oligopolies include the car industry, petrol retail, pharmaceutical industry, coffee shop retail, and airlines. In each of these industries, a few large companies dominate.
Detailed explanation-4: -The restaurant industry (monopolistically competitive nationwide) provides an example of a monopolistically competitive market. In most areas, there are many firms, each is different, and entry is easy. Each product has many close substitutes sold by different firms, including other restaurants, fast-food outlets.