Indicate which market structure most accurately characterizes each of the following industries.
Understand the Problem
The question is asking to classify different industries into specific market structures: monopoly, oligopoly, monopolistic competition, and perfect competition. Each industry provided in the answer bank needs to be matched to the correct market structure.
Answer
Monopoly: Cornwall Electric. Oligopoly: Aircraft manufacturing, smartphones. Monopolistic Competition: Hotel, dry cleaning.
Monopoly: Cornwall Electric. Oligopoly: The wide-body civilian aircraft manufacturing industry, the market for smartphones. Monopolistic Competition: The hotel industry, the dry cleaning industry. Perfect Competition: Not applicable based on given industries.
Answer for screen readers
Monopoly: Cornwall Electric. Oligopoly: The wide-body civilian aircraft manufacturing industry, the market for smartphones. Monopolistic Competition: The hotel industry, the dry cleaning industry. Perfect Competition: Not applicable based on given industries.
More Information
In a monopoly, a single firm dominates the market like Cornwall Electric in a specific area. Oligopolies have a few firms with significant market shares, such as aircraft manufacturing and smartphones. Monopolistic competition involves many firms with differentiated products, like hotels and dry cleaners.
Tips
Confusing oligopoly with monopolistic competition due to misunderstanding market power and product differentiation.
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