Shell and Valero are two of the relatively few sellers in the oil-refining industry.Due to the tremendous capital investment required to enter this industry,these companies are insulated significantly from the threat of new competitive entrants and thus have considerable control over price.This market situation is referred to as a(n)
A) cartel.
B) monopoly.
C) natural monopoly.
D) oligopoly.
E) trust.

Question

Quizplus · Accepted Answer

An oligopoly is a market structure characterized by a small number of firms that have significant control over market prices and high barriers to entry, which is the case with Shell and Valero in the oil-refining industry.

Shell and Valero Are Two of the Relatively Few Sellers