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13. The markets for laundry detergents, soft drinks and automobiles are dominated by a few

sellers. Economists would classify these markets as examples of:
a. Monopolistic competition
b. Perfect competition
C. Oligopolies
d. Monopolies

1 Answer

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Answer:

C. Oligopolies

Step-by-step explanation:

Oligopoly is a market structure dominated by a few big firms sellers serving a large number of buyers. For example, the mobile phone business in the US is a big market buy is dominated by four to six service providers. In the oligopoly market, the firms could be selling differentiated or identical products. Apart from the main dominating firms, they are other small companies operating in the industry, but their market share is small.

Other characteristics of an oligopoly include

  • Barriers to entry: heavy capital required to enter the market is a barrier to many interested sellers.
  • Heady advertising among the existing firms
  • There is interdependence and cooperation between the few sellers.
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