Define the following terms and explain their importance to the study of economics.
a. monopolistic competition
b. oligopoly
c. cartel
d. oligopolistic interdependence
What will be an ideal response?
a. Monopolistic competition is a market structure in which products are differentiated, but which otherwise has the same characteristics as perfect competition. There are many industries in the United States, particularly in retailing, that are monopolistically competitive.b. An oligopoly is a market dominated by a few sellers, several of which are large enough relative to the total market to be able to influence the market price. Much of U.S. manufacturing is characterized by oligopoly.c. A cartel is a group of sellers of a product who have joined together to control its production, sale, and price in the hope of obtaining the advantages of monopoly. Cartels are illegal in the United States, but are often legal elsewhere. OPEC is a good example of a cartel.d. Oligopolistic interdependence is a fact in most oligopolies. Each oligopolist is influenced by decisions of its rivals; outcomes of its own decisions depend on the responses of rivals. The interdependence makes it very difficult to analyze oligopolistic behavior.
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A) 5% B) 8.33% C) 10% D) 29.4%
Over the past five decades, the U.S. civilian unemployment rate has varied between, roughly, ________
A) 3% and 11% B) 55% and 60% C) 6% and 8% D) 0.2% to 0.4%