Table of contents

0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

14. Oligopoly

Characteristics of Oligopoly

Microeconomics

14. Oligopoly

Characteristics of Oligopoly

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Multiple Choice

One difference between oligopoly and monopolistic competition is that:

A monopolistically competitive industry has fewer firms

Fewer firms compete in oligopoly than in monopolistic competition

In monopolistic competition, products are identica

Monopolistic competition has barriers to entry

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Verified step by step guidance

Understand the key characteristics of oligopoly and monopolistic competition. Oligopoly is a market structure with a small number of firms, where each firm has significant market power. Monopolistic competition, on the other hand, involves many firms, each with some market power due to product differentiation.

Identify the number of firms in each market structure. In an oligopoly, there are fewer firms, which means each firm has a larger market share and more influence over market prices. In monopolistic competition, there are many firms, each with a smaller market share.

Consider the nature of the products offered in each market structure. In monopolistic competition, firms offer differentiated products, which means each firm's product is slightly different from its competitors'. This differentiation gives firms some pricing power.

Examine the barriers to entry in each market structure. Oligopolies often have high barriers to entry, which prevent new firms from entering the market easily. Monopolistic competition typically has low barriers to entry, allowing new firms to enter the market and compete.

Conclude by comparing the two market structures based on the number of firms, product differentiation, and barriers to entry. Fewer firms compete in an oligopoly than in monopolistic competition, and products in monopolistic competition are differentiated, not identical. Additionally, monopolistic competition generally has lower barriers to entry compared to oligopoly.