Question
In: Economics
Many product markets exhibit characteristics of both monopolistic competition and oligopolies, such as video game consoles...
Many product markets exhibit characteristics of both monopolistic competition and oligopolies, such as video game consoles and movie theater chains. What characteristics in each of these markets make it more monopolistically competitive? Which characteristics make it more like an oligopoly?
a. Elastic demand with differentiated products.
b. Differentiated products with mutual interdependence.
c. Single seller of a good or service and collusive agreement.
d. Large number of sellers with homogenous products.
Solutions
Expert Solution
Characteristics that make the market more monopolistically competitive:
a. Elastic demand with differentiated products
Characteristics that make the market more oligopolistic:
b. Differentiated products with mutual interdependence. (Differentiated Oligopoly)
c. Single seller of a good or service and collusive agreement. (Collusive oligopoly)
d. Large number of sellers with homogenous products. (Oligopoly)
Monopolistically competitive markets do not have mutual interdependence of firms. A monopolistically competitive market has a large number of firms which cannot collude to gain market power.
Presence of a large number of sellers with homogenous products make the market more like a competitive market. But, this characteristic of homogenous product makes the market less likely to be characterized as a monopolistically competitive market and hence it is put under oligopoly.
Rahul Sunny answered 2 years agoRelated Solutions
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Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and...
Maglie Company manufactures two video game consoles: handheld
and home. The handheld consoles are smaller and less expensive than
the home consoles. The company only recently began producing the
home model. Since the introduction of the new product, profits have
been steadily declining. Management believes that the accounting
system is not accurately allocating costs to products, particularly
because sales of the new product have been increasing.
Management has asked you to investigate the cost allocation
problem. You find that manufacturing...
Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and...
Maglie Company manufactures two video game consoles: handheld
and home. The handheld consoles are smaller and less expensive than
the home consoles. The company only recently began producing the
home model. Since the introduction of the new product, profits have
been steadily declining. Management believes that the accounting
system is not accurately allocating costs to products, particularly
because sales of the new product have been increasing. Management
has asked you to investigate the cost allocation problem. You find
that manufacturing...
Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and...
Maglie Company manufactures two video game consoles: handheld
and home. The handheld consoles are smaller and less expensive than
the home consoles. The company only recently began producing the
home model. Since the introduction of the new product, profits have
been steadily declining. Management believes that the accounting
system is not accurately allocating costs to products, particularly
because sales of the new product have been increasing.
Management has asked you to investigate the cost allocation
problem. You find that manufacturing...
Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and...
Maglie Company manufactures two video game consoles: handheld
and home. The handheld consoles are smaller and less expensive than
the home consoles. The company only recently began producing the
home model. Since the introduction of the new product, profits have
been steadily declining. Management believes that the accounting
system is not accurately allocating costs to products, particularly
because sales of the new product have been increasing.
Management has asked you to investigate the cost allocation
problem. You find that manufacturing...
Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and...
Maglie Company manufactures two video game consoles: handheld
and home. The handheld consoles are smaller and less expensive than
the home consoles. The company only recently began producing the
home model. Since the introduction of the new product, profits have
been steadily declining. Management believes that the accounting
system is not accurately allocating costs to products, particularly
because sales of the new product have been increasing.
Management has asked you to investigate the cost allocation
problem. You find that manufacturing...
Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and...
Maglie Company manufactures two video game consoles: handheld
and home. The handheld consoles are smaller and less expensive than
the home consoles. The company only recently began producing the
home model. Since the introduction of the new product, profits have
been steadily declining. Management believes that the accounting
system is not accurately allocating costs to products, particularly
because sales of the new product have been increasing.
Management has asked you to investigate the cost allocation
problem. You find that manufacturing...
Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and...
Maglie Company manufactures two video game consoles: handheld
and home. The handheld consoles are smaller and less expensive than
the home consoles. The company only recently began producing the
home model. Since the introduction of the new product, profits have
been steadily declining. Management believes that the accounting
system is not accurately allocating costs to products, particularly
because sales of the new product have been increasing.
Management has asked you to investigate the cost allocation
problem. You find that manufacturing...
Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and...
Maglie Company manufactures two video game consoles: handheld
and home. The handheld consoles are smaller and less expensive than
the home consoles. The company only recently began producing the
home model. Since the introduction of the new product, profits have
been steadily declining. Management believes that the accounting
system is not accurately allocating costs to products, particularly
because sales of the new product have been increasing.
Management has asked you to investigate the cost allocation
problem. You find that manufacturing...
Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and...
Maglie Company manufactures two video game consoles: handheld
and home. The handheld consoles are smaller and less expensive than
the home consoles. The company only recently began producing the
home model. Since the introduction of the new product, profits have
been steadily declining. Management believes that the accounting
system is not accurately allocating costs to products, particularly
because sales of the new product have been increasing.
Management has asked you to investigate the cost allocation
problem. You find that manufacturing...
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