What is a difference between oligopoly and monopolistic competition?
A) Oligopolists consider the actions and reactions of their competitors.
B) Oligopolists only compete with monopolists.
C) Monopolistic competitors act like monopolies and oligopolists don't.
D) Monopolistic competitors can make long-run profits.

Question

Quizplus · Accepted Answer

Oligopolists must consider the actions and reactions of their competitors because the market is dominated by a few firms, and each firm's decisions can significantly impact the market. Monopolistic competition involves many firms that compete against each other, but each firm has a slightly differentiated product, allowing for some degree of market power. However, in oligopoly, the interdependence among the few firms requires strategic thinking about competitors' potential moves.

What Is a Difference Between Oligopoly and Monopolistic Competition