ECONOMICS (CBSE/UGC NET)

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ECONOMICS

COMPETITION AND MARKET STRUCTURES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
In the 1990s, PLDT controlled 80% of the telecommunication industry and was the ONLY provider of long distance phone service. This is an example of
A
A monopoly
B
Monopolistic Competition
C
Perfect Competition
D
Oligopoly
Explanation: 

Detailed explanation-1: -From its start as a monopoly under the Philippine Long Distance Telephone Company (PLDT), the telecom industry has now been transformed to an oligopoly, with only three major players: PLDT, Globe and BayanTel.

Detailed explanation-2: -Restaurants, hair salons, household items, and clothing are examples of industries with monopolistic competition. Items like dish soap or hamburgers are sold, marketed, and priced by many competing companies.

Detailed explanation-3: -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.

Detailed explanation-4: -In a duopoly, two competing businesses control the majority of the market sector for a particular product or service they provide. For example, Coca-Cola and Pepsi represent a duopoly because the two firms control almost the entire market for cola beverages.

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