If firms in an industry differentiated their products and made economic profits in the short- run, what other characteristic would be important to determine if this is an oligopoly or a monopolistically competitive market?
A) If the good being sold is a normal or inferior good
B) The number of firms in the market
C) The number of buyers in the market
D) The number of close substitutes for the good being produced

Question

Quizplus · Accepted Answer

The key characteristic to determine if a market is an oligopoly or monopolistically competitive is the number of firms in the market. Oligopolies have a few large firms dominating the market, while monopolistically competitive markets have many firms.

If Firms in an Industry Differentiated Their Products and Made