Question

Characteristics	Monopolistic Competition	Oligopoly
Number of firm(s) in the market	(1 point)……………………	(1 point)……………………
Number of firm(s) dominating the market	(1 point) ………………	(1 point)……………………
Products differentiation	(1 point) …………………	(1 point)……………………
Barriers to entry	(1 point) …………………	(1 point)……………………
Monopoly power of firms	(1 point) …………………	(1 point)……………………

Explain the different characteristics between a monopolistic competition and an oligopolistic market!

Answer 1

Characteristics	Monopolistic	Oligopolistic
Number of firms	Large number of firms in the market. Ample alternatives at the consumer's disposal.	Very few (2 to 10) number of firms in the market. Therefore consumers have less alternatives
Number of firms dominating the market	Due to a large number of firms, no individual firm has significant market power, thereby doesn't have any say on fixing prices.	Few firms may dominate in an oligopolistic market because of them being established in the market. The new comers in the oligopolistic market are the ones who are at loss due to this domination.
Product differentiation	High amount of product differentiation is common in monopolistic markets. This is mainly due to the large number of firms which pushes the firms to resort to these strategies to maintain profits	Less product differentiation. Due to the lesser number of firms, the idea of product differentiation isn't so pressing
Barriers to entry	Very low barriers of entry due to no significant market control over any single firm.	High barriers of entry because of the strict competition.
Monopoly power	No individual monopolies due to the large number of firms.	As discussed, select few firms have dominance over the market but no monopoly is explicitly visible.

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