When General Mills and a few other firms dominate the American cereal market, this is an example of
A) pure competition.
B) monopolistic competition.
C) oligopoly.
D) natural monopoly.
E) monopoly.

Question

Quizplus · Accepted Answer

An oligopoly is when a small number of firms, in this case General Mills and a few others, dominate a market. This is different from pure competition, where there are many firms competing, and monopolistic competition, where there are many firms but each has some degree of market power through differentiation. A natural monopoly occurs when one firm can provide a good or service at a lower cost than any potential competitor, while a monopoly is when there is only one firm in the market.

When General Mills and a Few Other Firms Dominate the American