Exxon Mobil and Shell are two of the relatively few sellers in the oil-refining industry. Due to the tremendous capital investment required to enter this industry, these companies are insulated significantly from the threat of new competitive entrants and thus have considerable control over price. What is this market situation referred to as?
A) a cartel
B) a pure market
C) a natural monopoly
D) an oligopoly

Question

Quizplus · Accepted Answer

The market situation described is an oligopoly, where a few sellers dominate the market and have significant control over price due to barriers to entry for new competitors.

Exxon Mobil and Shell Are Two of the Relatively Few