Computers B Us is a manufacturer of customized microcomputers. They are able to set their prices higher than competitors because they can assemble a computer to a customer's exact specifications. Computers B Us is operating in a competitive environment of
A) oligopolistic competition.
B) perfect competition.
C) monopolistic competition.
D) monopoly.
E) oligopoly.

Question

Quizplus · Accepted Answer

The characteristics of monopolistic competition match those described in the scenario, including the ability to set prices higher due to product differentiation (customization), multiple competing firms, and easy market entry and exit. Oligopolistic competition, oligopoly, and monopoly all involve different market structures with unique features not present in the scenario, while perfect competition would not allow for the ability to set higher prices based on customization.

Computers B Us Is a Manufacturer of Customized Microcomputers