Question

n the following list are a number of well-known companies and the products that they sell. Which of the four types of markets (pure monopoly, oligopoly, monopolistic competition, perfect competition) best characterizes the markets in which they compete? Explain why. a) McDonald's- hamburgers b) ExxonMobil- gas c) Dell- personal computers d) Heinz- ketchup e) Proctor & Gamble- disposable diapers f) Starbucks- gourmet coffee g) Domino’s- pizza h) Intel- computer chip for the PC (p. 381 #9)

Answer 1

Monopolistic Competition is the type of market that characterizes the markets in which the following compete:

a) McDonald's- hamburgers

b) ExxonMobil- gas

c) Dell- personal computers

d) Heinz- ketchup

e) Procter & Gamble- disposable diapers

f) Starbucks- gourmet coffee

g) Domino’s- pizza

h) Intel- computer chip for the PC

2. The reason for this choice is that there is no perfect competition in any market. It remains an ideal. The products of these firms are not perfect substitutes. The firms do not have equal market share and control in their respective markets or industry. Lastly, there is no single producer in any of the markets.

Step-by-step explanation:

Types of markets:

Pure monopoly = a single producer with no substitute product or service.

Oligopoly = two or more firms in an industry with equal market share and control.

Monopolistic competition = Many firms offering similar products that are not perfect substitutes

Perfect competition = Many firms offering similar products that are perfect substitute.