Practice question · Put in order
Order market structures from most to least market power.
- Monopolistic competition (many firms, slight differentiation)
- Oligopoly (few firms, strategic interaction)
- Perfect competition (many firms, homogeneous product)
- Monopoly (single seller, full market power)
Hints
- Market power falls as the number of sellers rises.
- Differentiation preserves some power even with many sellers.
Show the answer
- Monopoly (single seller, full market power)
- Oligopoly (few firms, strategic interaction)
- Monopolistic competition (many firms, slight differentiation)
- Perfect competition (many firms, homogeneous product)
Why
Market power decreases as the number of firms increases and product differentiation decreases.
Practise Monopolistic Competition and Oligopoly
The app has 8 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on Monopolistic Competition and Oligopoly
- Monopolistic competition produces zero long-run profit like perfect competition, yet firms price above…
- Which spreadsheet formula computes HHI from market shares in cells A1:A5 (as percentages)?
- In the Bertrand model with identical products and equal costs, two firms are enough to drive the price to…
- In the Cournot example (P = 100 - Q, MC = 10), the monopoly output would be Qm = 45 and the competitive…