Question

Many firms of all sizes actively compete in the computer hardware industry, and there are no firms with a large market share. Product offerings tend to be similar but are differentiated in ways that enable some firms to raise or impact pricing. The computer hardware industry is an example of ______.

Multiple choice question.
perfectly competitive industry
oligopolistic industry
natural monopoly
monopolistic competition

Answer 1

The computer hardware industry is an example of monopolistic competition, where many firms offer differentiated products and can influence pricing without a dominant market share.

Step-by-step explanation:

The computer hardware industry described in the question is an example of monopolistic competition. This market structure features many firms that compete with one another while offering differentiated products, allowing firms some power over pricing. Competing firms in a monopolistic competition have the ability to influence prices due to the uniqueness of their products, even though there are many firms in the industry and no single company dominates the market share. These characteristics align with the provided description of the computer hardware industry, where no single firm has a large market share and the products are similar yet differentiated enough to affect pricing.