Which of the following industries would you classify as an o

Which of the following industries would you classify as an oligopoly? Explain your answer. The industry for motorcycles is ____________. A. monopolistically competitive because there are a few firms selling a differentiated product. B. an oligopoly because there are a few firms that face the limited entry of new firms. C. monopolistically competitive because there are many firms with no market power. D. monopolistically competitive because there are many firms that produce a homogeneous product. E. an oligopoly because there are a few firms that are price takers.

The industry for hotels is ____________. A. monopolistically competitive because there are many firms selling a differentiated product. B. monopolistically competitive because there are many firms facing the limited entry of new firms. C. monopolistically competitive or an oligopoly depending on the number of firms, market power, and potential entry. D. an oligopoly because firms produce differentiated products and are price makers. E. an oligopoly because there are a few firms that are price takers.

The industry for cruise lines is ____________. A. monopolistically competitive because there are many firms producing a homogeneous product. B. an oligopoly because there are only a few firms that engage in strategic behavior. C. an oligopoly because there are a few firms that are price takers. D. monopolistically competitive because there are many firms facing the limited entry of new firms. E. an oligopoly because the firms have no market power.

The industry for firearms is ____________. A. an oligopoly because there are a few firms that are price takers. B. monopolistically competitive because firms that produce firearms face a perfectly elastic demand curve. C. an oligopoly because firms produce differentiated products and are price makers. D. monopolistically competitive because there are many firms facing the limited entry of new firms. E. monopolistically competitive because there are many firms selling a differentiated product.

The industry for furniture is ____________. A. monopolistically competitive because there are many firms facing the limited entry of new firms. B. an oligopoly because the firms have no market power. C. monopolistically competitive because there are many firms selling a differentiated product. D. an oligopoly because there are a few firms that are price takers. E. an oligopoly because firms produce a differentiated product and are price makers.

Solution

Definitions:

1.Monopolistic competition is the type of market where many producers sell products that are differentiated from one another.

2. Oligopoly is the type of market where no. of sellers are less.

Answer 1. B.

Explanation: The industry for motorcycles is an oligopoly because there are a few firms that face the limited entry of new firms.

Motorcycle producers are very few and its not very easy to enter this market. Therefore this is an oligpoly.

Anwer 2. A.

Explanation:The industry for hotels is  monopolistically competitive because there are many firms selling a differentiated product. There are many hotels whose services are differentiated.

Answer 3. B

Explanation: The industry for cruise lines is an oligopoly because there are only a few firms that engage in strategic behavior. Crusie line business are very few and no one easily enters this market.

Answer 4. A.

The industry for firearms is an oligopoly because there are a few firms that are price takers. Again, only few people do firearms business, its not easy to open a firearm firm for everyone. And also, firearms is not a differentiated product. A particular type of rifle like AK-47 is same no matter which firm produces it.

Answer 5. C.

The industry for furniture is monopolistically competitive because there are many firms selling a differentiated product. There are many firms which sell furniture whose furniture differ by designs.