ECONOMICS
COMPETITION AND MARKET STRUCTURES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
TRUE
|
|
|
FALSE
|
|
|
Either A or B
|
|
|
None of the above
|
Detailed explanation-1: -The market for crude oil is an example of an oligopolistic market. The unique feature of an oligopoly market is that the actions of one seller have a significant impact on the profits of all of the other sellers in the market. When firms cooperate with one another, it is generally good for society as a whole.
Detailed explanation-2: -The distinctive feature of an oligopoly is interdependence. Oligopolies are typically composed of a few large firms. Each firm is so large that its actions affect market conditions. Therefore, the competing firms will be aware of a firm’s market actions and will respond appropriately.
Detailed explanation-3: -Features of oligopoly market: There are few firms or sellers. Sellers sell differentiated product. There is free entry and exit of firms. There is considerable element of uncertainty in this type-Economics.
Detailed explanation-4: -The special case of oligopoly where there are exactly two sellers is called duopoly.
Detailed explanation-5: -Firms are interdependent. Product differentiation. High barriers to entry. Uncertainty.