Which of the following statements is correct regarding different types of markets?

• A. Monopolistic competition is characterized by a single seller dominating the market.
• B. Oligopoly markets have only one buyer and one seller.
• C. In a monopoly, there are many firms competing with differentiated products.
• D. In a perfectly competitive market, firms are price takers and there are many sellers offering identical products.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the characteristics of different market structures: perfect competition, monopoly, monopolistic competition, and oligopoly.
2. Step 2: Recall that in a perfectly competitive market, there are many sellers offering identical (homogeneous) products, and firms are price takers, meaning they cannot influence the market price.
3. Step 3: Recognize that a monopoly is a market with a single seller dominating the market, not many firms with differentiated products.
4. Step 4: Know that monopolistic competition involves many firms competing with differentiated products, not a single seller.
5. Step 5: Understand that an oligopoly consists of a few sellers dominating the market, and it does not mean there is only one buyer and one seller.