Which of the following is an example of an oligopoly?
A)Oil producers restrict global oil supply in order to prop up the price of oil.
B)The automobile industry in the 1970s was dominated by four or five large firms.
C)Taiwan spurs exports to developed countries by subsidizing certain popular industries.
D)Mexico attempts to become self-sufficient by erecting trade barriers and developing domestic industry.
E)Cotton farmers receive large amounts of subsidies from the U.S.government.

Question

Quizplus · Accepted Answer

An oligopoly is a market structure in which a small number of firms dominate the market. The presence of four or five large firms dominating the automobile industry in the 1970s is an example of an oligopoly.

Option A describes an example of collusion among producers to manipulate prices and is an example of a cartel.  Option C describes a form of government intervention to stimulate exports and is an example of strategic trade policy. Option D describes a policy of protectionism to protect domestic industries and is an example of import substitution. Option E describes a form of government subsidy to support specific industries and is an example of a government intervention.

Which of the Following Is an Example of an Oligopoly