An industry with three firms and a differentiated product is most likely a(n)________,while an industry with three thousand firms and a differentiated product is most likely a(n)________ industry.
A) perfect competition; oligopolistic
B) monopoly; perfectly competitive
C) oligopoly; monopolistic competitive
D) oligopoly; perfectly competitive

Question

Quizplus · Accepted Answer

A monopoly exists when there is one large firm supplying the market. Perfectly competitive industries generally do not have differentiated products. So the correct answer here is an oligopoly has three firms and a monopolistic competitive industry has many firms but differentiated products.

An Industry with Three Firms and a Differentiated Product Is