Question

1.

Your local water department (probably the City of Cleveland Division of Water) provides "running" water service to your residence. The water department is best described as

	A.	Pure competition
	B.	Monopolistic competition
	C.	Oligopoly
	D.	Pure monopoly

2.

The market for agricultural products (like Florida oranges) is best described as

	A.	Pure competition
	B.	Monopolistic competition
	C.	Oligopoly
	D.	Pure monopoly

3.

Automobile manufacturing is best described as

	A.	Pure competition
	B.	Monopolistic competition
	C.	Oligopoly
	D.	Pure monopoly

4.

Which of the following industry types has ONLY A SINGLE SELLER?

	A.	Pure competition
	B.	Monopolistic competition
	C.	Oligopoly
	D.	Pure monopoly

Answer 1

Pure competition :-

This is a situation where there are too many sellers and too many buyers in the market. Every seller provides identical products.

Monopolistic competition :-

Situation where there are less number of sellers and too many buyers. The most divided by sellers are similar to each other but cannot be an identical. In this situation the pricing of product and production product influenced by one of the member or seller.

Oligopoly competition :-

Situation where there are few number of sellers and few number of buyers. Sellers provide similar product but not identical products

Pure monopoly :-

This is a situation where there is only one seller in the market who provides specific type of product in too many buyers. in this situation the price and production capacity of the product will be determined by the single seller.

1. The water department which provides running water services can be monopolistic competition. The service of providing running water will be done by department of government. The major supplier of the services is government. In major situations the price and capacity of service will be influencer by the department. So we can say this is a monopolistic competition.

Answer is option B.

2. Market for agricultural products is pure competition. In this situation sellers provide mostly similar products but not completely identical to each other. even though this competition can be termed as pure competition.

Answer is option A.

3. Automobile manufacturing is best described as oligopoly competition.inbthus situation there are few sellers and few buyer. Product are similar to each other

Answer is option C.

4. Pure monopoly type of industry has only single seller of the poduct and price and capacity of product will be determined by that single seller only.

Answer is option D.

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