Which of the following is a correct listing of industry models ordered from most competitive to least competitive?
A) perfect competition - monopolistic competition - monopoly
B) perfect competition - monopoly - monopolistic competition
C) monopolistic competition - perfect competition - monopoly
D) monopolistic competition - monopoly - perfect competition

Question

Quizplus · Accepted Answer

Perfect competition is the most competitive market structure as there are numerous buyers and sellers, homogeneous products, and free entry and exit. In monopolistic competition, there are still many firms but they have some degree of control over their prices due to product differentiation. Monopoly is the least competitive market structure as there is only one firm with significant market power and no close substitutes. Therefore, the correct order from most to least competitive is perfect competition, monopolistic competition, and monopoly.

Which of the Following Is a Correct Listing of Industry