Which type of industry is characterized by a limited number of competing firms?

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

Answer: (B)

Verified step by step guidance

1. Understand the characteristics of different market structures: Perfect competition, Monopoly, Monopolistic competition, and Oligopoly.
2. Recall that perfect competition involves many firms with identical products, so it does not have a limited number of firms.
3. Recognize that a monopoly has only one firm dominating the entire market, which is not a limited number but a single firm.
4. Identify that monopolistic competition has many firms selling differentiated products, so it also does not have a limited number of firms.
5. Conclude that an oligopoly is characterized by a few firms dominating the market, which means it has a limited number of competing firms.