Which of the following is similar for oligopoly and monopolistic competition?
A)Both have many firms.
B)Both have low concentration ratios.
C)Both have market power.

Question

Quizplus · Accepted Answer

Both oligopoly and monopolistic competition have market power, meaning that they have the ability to influence prices and output in the market. In oligopoly, this is typically due to a small number of large firms dominating the market, while in monopolistic competition it is due to each firm having some degree of product differentiation that allows them to have some pricing power. Option A is incorrect as oligopoly typically has only a few large firms, while monopolistic competition has many small firms. Option B is also incorrect as concentration ratios are typically high in oligopoly, but low in monopolistic competition.

Which of the Following Is Similar for Oligopoly and Monopolistic