There are many firms in the case of a. monopoly. b. monopolistic competition and

Question

There are many firms in the case of a. monopoly. b. monopolistic competition and oligopoly. c. perfect competition and oligopoly. d. perfect competition and monopolistic competition. There are many firms in the case of a. monopoly. b. monopolistic competition and oligopoly. c. perfect competition and oligopoly. d. perfect competition and monopolistic competition. There are many firms in the case of a. monopoly. b. monopolistic competition and oligopoly. c. perfect competition and oligopoly. d. perfect competition and monopolistic competition.

Explanation / Answer

Perfect competition and monopolistic competition are the two market structures characterised by the presence of many firms. In comparison, on the other hand, both monopoly and oligopoly are respectively characterised by a presence of one large firm and very small number of large firms. In a perfect competition, there is a presence of many small firms each selling same product or service with no barriers to entry and exit. In a monopolistic competition, there are large number of producers each selling a differentiated product or service. In a monopoly, there is only one single firm producing/supplying good or service in the market thus having significant market power. In an oligopoly, there are very small number of large firms selling either identical or differentiated goods or services. Hence, there are many firms only under the perfect competition and monopolistic competition. Thus the correct answer is d. perfect competition and monopolistic competition

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