Go to any Dominion supermarket and walk to the cereal aisle. You will notice four brands - Kellogg's, Quaker, General Mills, and Post-seem to occupy most of the shelf space. These cereals are all priced about the same. There is a good deal of product differentiation as the result of licensing agreements that have created a line of Disney cereals and through the use of different health claims. Given this information, you should know the cereal industry is an example of:
A)monopolistic competition.
B)a pure monopoly.
C)a pure competition.
D)an oligopoly.

Question

Quizplus · Accepted Answer

The cereal industry is an example of an oligopoly because it is dominated by a few large firms (Kellogg's, Quaker, General Mills, and Post) that have significant control over the market, and there is product differentiation.

Go to Any Dominion Supermarket and Walk to the Cereal