Which market structure has -a small number of firms, each with high level of market power; -high barriers to entry, making it difficult for new firms to enter; and -mutual interdependence among firms?单项选择题
A
a. Monopoly
B
b. Perfect competition
C
c. Monopolistic competition
D
d. Oligopoly

Question

Which market structure has -a small number of firms, each with high level of market power; -high barriers to entry, making it difficult for new firms to enter; and -mutual interdependence among firms?

BlackTom AI · Accepted Answer

Oligopoly is characterized by a small number of firms, high barriers to entry, and mutual interdependence, so the correct choice is d. Oligopoly.

1. Relevant concepts and definitions
- Oligopoly: market dominated by a few large firms; each firm has significant market power and decisions (price, output, advertising) affect rivals. Barriers to entry (large capital, patents, scale economies) limit new entrants. Firms are interdependent and may compete or tacitly collude.
- Monopoly: single seller with almost total market power and very high entry barriers.
- Perfect competition: many small firms, identical products, no market power, free entry/exit.
- Monopolistic competition: many firms, product differentiation gives some price-setting power, but low barriers allow entry/exit.

2. Step-by-step reasoning matching the question’s three criteria
- “A small number of firms”: Oligopoly explicitly involves few dominant firms (e.g., 3–10). Monopoly has one firm (not a small number), perfect and monopolistic competition have many firms.
- “Each with high level of market power”: In an oligopoly each firm can influence market price; monopoly has even higher power but only one firm; monopolistic competition firms have limited power due to many rivals; perfect competition firms are price takers (no power).
- “High barriers to entry, making it difficult for new firms to enter”: Oligopolies typically have substantial barriers (scale economies, network effects, legal barriers). Monopolies also have high barriers, while perfect and monopolistic competition have low barriers.
- “Mutual interdependence among firms”: This is a defining feature of oligopoly—firms consider rivals’ likely reactions. Monopoly (single firm) has no such interdependence; many-firm structures also lack strong mutual interdependence.

3. Calculations
- None required for this conceptual question.

4. Why d. Oligopoly is correct
- Oligopoly uniquely satisfies all three listed properties simultaneously: few firms, strong market power for each, high entry barriers, and strategic interdependence.

5. Why other options are incorrect
- a. Monopoly: single firm (not a small number of firms). b. Perfect competition: many firms, no market power, low barriers. c. Monopolistic competition: many firms and low barriers; firms aren’t mutually interdependent to the same degree.

Conclusion: The correct answer is d. Oligopoly, which matches the provided answer.

Which market structure has -a small number of firms, each with high level of market power; -high barriers to entry, making it difficult for new firms to enter; and -mutual interdependence among firms?单项选择题

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Which market structure has -a small number of firms, each with high level of market power; -high barriers to entry, making it difficult for new firms to enter; and -mutual interdependence among firms?单项选择题

类似问题

A perfectly competitive firm is said to be more efficient than a monopoly firm because

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更多留学生实用工具

希望你的学习变得更简单

The threat of competitors’ entering a market is very high in industries that perform a(n) _ role and in industries where the primary product or service is _.