Question 34 (5 points) Monopolistic competition is distinguished from oligopoly

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Question 34 (5 points) Monopolistic competition is distinguished from oligopoly by the fact that: O in monopolistic competition, firms do not worry about the reactions of their rivals. O there is no competition in oligopoly. O oligopoly is a form of imperfect competition. O the demand curve facing the firm is downward sloping in monopolistic competition. O price is above marginal cost in an oligopoly. Save Question 35 (5 points) The market structure in which there are several firms in the industry, each concerned with the behavior of its rivals is called: monopolistic competition. O monopoly. perfect competition O oligopoly. oligopolistic competition.

Explanation / Answer

Both the selected answers are correct

While there is product differentiation in monopolistic competition, products are either identical or differentiated in oligopoly. Firms in oligopoly have to consider the reaction or response of their rivals as their own actions affect their rival's decisions. In monopolistic competition however, there is no such dependency.

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