Question

Which market structure is more common in the U.S. economy, oligopoly markets or monopolistically competitive markets? Please find a source or sources to support your answer.

Answer 1

The one type of imperfectly competitive market is oligopoly. Oligopolistic markets are those dominated by a small number of firms. Commercial aircraft provides a good example: Boeing and Airbus each produce slightly less than 50% of the large commercial aircraft in the world. Another example is the U.S. soft drink industry, which is dominated by Coca-Cola and Pepsi. Basically there is a presence of oligopoly in the US but oligopoly is in some sector not the most common market in US .

One type of imperfectly competitive market is called monopolistic competition. Monopolistically competitive markets feature a large number of competing firms, but the products that they sell are not identical. Consider, as an example, the Mall of America in Minnesota, the largest shopping mall in the United States. In 2010, the Mall of America had 24 stores that sold women’s “ready-to-wear” clothing , another 50 stores that sold clothing for both men and women, plus 14 more stores that sold women’s specialty clothing . Most of the markets that consumers encounter at the retail level are monopolistically competitive.