Which of the following market structures describes an industry in which all firms produce differentiated output and there are few barriers to entry?
A) perfect competition
B) monopoly
C) oligopoly
D) a cartel
E) monopolistic competition

Question

Quizplus · Accepted Answer

Monopolistic competition is a market structure where there are many firms producing differentiated products, meaning that they are not perfect substitutes. There are few barriers to entry for new firms to enter the market, making it easier for competition. This is different from a monopoly, where there is only one producer in the market and significant barriers to entry. In an oligopoly, there are only a few producers in the market who have significant control over prices and output. A cartel is a group of producers who collude to set prices and output levels, which is illegal in many countries. Perfect competition is a theoretical market structure characterized by a large number of small firms producing homogeneous products, with no barriers to entry or exit, and price-taking behavior.

Which of the Following Market Structures Describes an Industry in Which