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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Monopolistic Competition
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Oligopoly
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Monopoly
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Detailed explanation-1: -The correct sequence of the market structure from most to least competitive is perfect competition, imperfect competition, oligopoly and pure monopoly.
Detailed explanation-2: -Oligopoly. An oligopoly is dominated by a few firms, resulting in limited competition. They can collaborate with or compete against each other to use their collective market power to drive up prices and earn more profit. Entering into an oligopoly is difficult.
Detailed explanation-3: -A monopoly is when a single company dominates an industry and can set prices for its product without fear of competition. Monopolies limit consumer choices and control production quantity and quality.
Detailed explanation-4: -When a monopolist produces the quantity determined by the intersection of MR and MC, it can charge the price determined by the market demand curve at the quantity. Therefore, monopolists produce less but charge more than a firm in a competitive market.