Netflix is an example of which market structure?

• A. Oligopoly
• B. Perfect competition
• C. Monopolistic competition
• D. Monopoly

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the characteristics of each market structure listed: Monopoly, Oligopoly, Perfect Competition, and Monopolistic Competition.
2. Step 2: Recall that a Monopoly is a market structure where a single firm is the sole seller of a product with no close substitutes, and there are high barriers to entry preventing other firms from entering the market.
3. Step 3: Consider the nature of Netflix's market: it is a dominant firm in streaming services with significant control over its content and pricing, and it faces limited direct competition due to exclusive content and brand recognition.
4. Step 4: Compare Netflix's market position to the definitions of Oligopoly (few firms), Perfect Competition (many firms, identical products), and Monopolistic Competition (many firms, differentiated products but easy entry).
5. Step 5: Conclude that Netflix fits best into the Monopoly category because it has substantial market power and limited competition, aligning with the characteristics of a monopoly.