An oligopoly situation exists when a. there is only one buyer b. there is only o
ID: 351436 • Letter: A
Question
An oligopoly situation exists when a. there is only one buyer b. there is only one supplier and there are significant barriers to new competitors. c. numerous competitors offer undifferentiated products. d. numerous competitors offer similar products, prompting the competitors to strive to make their products unique from others. e. there is a small number of competitors offering similar, but somewhat differentiated, products and there are significant barriers to new competitors. An oligopoly situation exists when a. there is only one buyer b. there is only one supplier and there are significant barriers to new competitors. c. numerous competitors offer undifferentiated products. d. numerous competitors offer similar products, prompting the competitors to strive to make their products unique from others. e. there is a small number of competitors offering similar, but somewhat differentiated, products and there are significant barriers to new competitors. An oligopoly situation exists when a. there is only one buyer b. there is only one supplier and there are significant barriers to new competitors. c. numerous competitors offer undifferentiated products. d. numerous competitors offer similar products, prompting the competitors to strive to make their products unique from others. e. there is a small number of competitors offering similar, but somewhat differentiated, products and there are significant barriers to new competitors.Explanation / Answer
Option E is correct- There are a small number of competitors offering similar, but somewhat differentiated, products and there are significant barriers to new competitors.
Oligopoly is the market condition in which handful sellers and one firm action influence the market and such firm concern for profit maximization. Oligopoly firms are price setter and such firms can retain abnormal long term profits. There are barrier in entry of new firms in oligopoly situation. Oligopoly is offering differentiated products and may be homogenous products.