One way in which monopolistic competition differs from oligopoly is that
A)there are no barriers to entry in oligopolies.
B)in oligopoly markets there are only a few sellers.
C)all firms in an oligopoly eventually earn zero economic profits.
D)strategic interactions between firms are rare in oligopolies.

Question

Quizplus · Accepted Answer

In monopolistic competition, there are many firms competing with differentiated products, while in oligopoly, only a few firms dominate the market. Another key difference is that in monopolistic competition, there are low barriers to entry, while in oligopoly, there may be significant barriers to entry that prevent new firms from entering the market. Strategic interactions between firms are common in oligopoly, as each firm must consider the actions of its competitors when making pricing and production decisions. Additionally, not all firms in an oligopoly necessarily earn zero economic profits, as this will depend on the specific market conditions and the behavior of the firms involved.

One Way in Which Monopolistic Competition Differs from Oligopoly Is