In contrast to both perfect competition and monopolistic competition,an oligopoly market structure is characterized by:
A)price discrimination.
B)a perfectly inelastic demand curve.
C)the presence of infinite number of firms.
D)only differentiated products.
E)difficulty in the entry of new firms.

Question

Quizplus · Accepted Answer

Oligopoly market structure is characterized by a small number of dominant firms that have significant market power, making it difficult for new firms to enter the market. Therefore, option E is the correct answer as it highlights the difficulty in the entry of new firms. Options A and B are not applicable to oligopoly, and option C is more suited to perfect competition. Option D may be true for some oligopolies, but not all.

In Contrast to Both Perfect Competition and Monopolistic Competition,an Oligopoly