Multiple Choice
In a competitive market, by using a differentiation strategy, a firm aims to:
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3. The Market Forces of Supply and Demand
Competitive Markets
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In which of the following market structures are no close substitutes readily available for the product offered by firms?
A
Perfect competition
B
Monopolistic competition
C
Oligopoly
D
Monopoly
Verified step by step guidance1
Understand the concept of 'close substitutes' in microeconomics: these are products that consumers see as similar enough to replace one another if the price or quality changes.
Review the characteristics of each market structure: Perfect competition has many firms offering identical products, so close substitutes are abundant.
Monopolistic competition features many firms offering differentiated products, which means there are some close substitutes but not identical ones.
Oligopoly consists of a few firms that may offer similar or differentiated products, so close substitutes can exist but are limited.
Monopoly is characterized by a single firm offering a unique product with no close substitutes, which is why consumers have no alternative choices.
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