SSC MTS EXAM

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SSC

GENERAL ECONOMICS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
In the 1990s, AT&T controlled 80% of the phone 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: -Detailed Solution. The correct answer is Oligopoly. The phone operators market in India is an example of an Oligopoly. Oligopolies occur when a small number of firms collude to restrict output and/or fix prices, in order to achieve above normal market returns.

Detailed explanation-2: -Answer and Explanation: The cellular industry of U.S. is not an example of monopolistic competition. It is an example of an oligopoly market form. This is because the firms Sprint, AT&T, Verizon, and T-Mobile own about 95% of the market share of the U.S. cellular market.

Detailed explanation-3: -A monopoly is a firm who is the sole seller of its product, and where there are no close substitutes. An unregulated monopoly has market power and can influence prices. Examples: Microsoft and Windows, DeBeers and diamonds, your local natural gas company.

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