Asked by Angelica Melo-Perez on May 14, 2024
Verified
Some observers assert that oligopolies are less socially desirable than pure monopolies because
A) monopolies are often government-regulated, whereas collusion among oligopolies may lead to similar results as a monopoly yet, having several firms, may give the illusion of competition.
B) monopolies have unique products, whereas product differentiation in oligopolies would lead to economic inefficiencies.
C) mutual interdependence among firms in an oligopoly would lead to more inefficiencies than in the case of a monopoly.
D) oligopolies tend to engage in advertising more so than monopolies.
Oligopolies
Market structures characterized by a small number of firms controlling a large majority of the market share and having significant impact on prices and production.
Pure Monopolies
Market structures characterized by a single seller that faces no competition, typically due to high barriers to entry.
Socially Desirable
Refers to actions or policies that are considered beneficial to the wider community or society as a whole.
- Evaluate oligopoly market behaviors such as cartels, price leadership, and collusion, focusing on their dynamics and effects.
- Understand the possible beneficial and detrimental financial impacts of advertising on market rivalry and the well-being of consumers.
Verified Answer
NR
Noemi ReyesMay 21, 2024
Final Answer :
A
Explanation :
Monopolies are often subject to government regulation to prevent abuse of market power, while oligopolies can collude to set prices or output similar to a monopoly but with the appearance of competition, which can be misleading and less regulated.
Learning Objectives
- Evaluate oligopoly market behaviors such as cartels, price leadership, and collusion, focusing on their dynamics and effects.
- Understand the possible beneficial and detrimental financial impacts of advertising on market rivalry and the well-being of consumers.