In the market for breakfast cereals, a few large producers, such as General Mills, Post, Quaker, and Kellogg, dominate the market. This best describes which of the following?

Question

Quizplus · Accepted Answer

An oligopoly market structure is characterized by a few dominant firms controlling the market. In this case, only a few large producers dominate the breakfast cereal market. This is not a monopoly because there are multiple producers, but it is also not perfect competition or monopolistic competition because there are only a few dominant firms rather than a large number of small firms. It is also not a limited cartel as the firms are not colluding to control prices or output collectively.

In the Market for Breakfast Cereals, a Few Large Producers