Question

Swadee's Jewelry is one of six hundred makers of ruby rings in Thailand. The rings display differences across the companies because each jewelry company has its own designs. Swadee is the fourth-largest producer of ruby rings in Thailand and sells 15% of the ruby rings in the market. Which statement is descriptive of the structure of the ruby ring market in Thailand?(A) The market cannot be monopolistic competition or an oligopoly.(B) The ruby ring market is an oligopoly because there are six hundred companies competing against each other.(C) It is a perfectly competitive market since there are six hundred companies that produce a homogeneous product.(D) It has some characteristics of monopolistic competition except that there are a few firms that have significant market share.

Answer 1

Answer:D. It has some characteristics of monopolistic competition except there are few firms with significant market share.

Step-by-step explanation:

A monopolistic competition comprises of many producers whose products are differentiated, while in oligopoly market there is market dominance by a few producers.

The market has the features of both monopolistic competition and oligopoly combined, the competition of six hundred companies does make it an oligopoly, the product are not homogeneous so it cannot be a perfect market but rather it has the features of a monopolistic market because there are many producers selling differentiated products but the market dominance of few producers makes it an oligopoly.