One difference between oligopoly and monopolistic competition is
A)there is a smaller number of firms in a monopolistically competitive market than in an oligopoly.
B)in oligopolies firms make slightly different products whereas in monopolistic competition the products are identical.
C)monopolistic competition has barriers to entry, whereas oligopoly has none.
D)fewer firms compete in an oligopoly than in a monopolistically competitive market.
E)in oligopolies, firms are typically smaller in size.

Question

Quizplus · Accepted Answer

The main difference between oligopoly and monopolistic competition is the number of firms competing in the market. In oligopoly, there are few firms that dominate the market, while in monopolistic competition, there are many small firms competing with each other. So, option D is correct because it states that there are fewer firms in an oligopoly than in a monopolistically competitive market. Options A and E are incorrect because they contradict the definition of these market structures. Option B is incorrect because in monopolistic competition, firms produce differentiated products, whereas in oligopoly, they may produce either differentiated or identical products. Option C is incorrect because both oligopoly and monopolistic competition have barriers to entry, but they differ in their level of intensity.

One Difference Between Oligopoly and Monopolistic Competition Is