Multiple Choice QuestionTwo types of market models that closely approximate many markets in the real world areMultiple choice question.monopolistic competition and oligopoly.monopoly and oligopoly.monopoly and monopolistic competition.pure competition and oligopoly.pure competition and monopolistic competition.pure competition and monopoly.
Question
Multiple Choice QuestionTwo types of market models that closely approximate many markets in the real world areMultiple choice question.monopolistic competition and oligopoly.monopoly and oligopoly.monopoly and monopolistic competition.pure competition and oligopoly.pure competition and monopolistic competition.pure competition and monopoly.
Solution
The correct answer is "monopolistic competition and oligopoly." These two market models are often seen in many real-world markets.
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another. This differentiation can be real or perceived. Examples of monopolistic competition include restaurants, hair salons, clothing brands, etc.
Oligopoly, on the other hand, is a market structure in which a small number of firms has the large majority of market share. An oligopoly is similar to a monopoly, but it is differentiated by the number of firms in the market. Examples of oligopoly include the airline industry, cable television, etc.
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