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The pricing of products in the oligopoly market is unlike the pricing in the monopolistically competitive...

The pricing of products in the oligopoly market is unlike the pricing in the monopolistically competitive market.

a. True b. False
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Answer #1

Option A is correct.

Because in Monopolistic competition is a middle ground between monopoly and perfect competition (a purely theoretical state), and combines elements of each. All firms in monopolistic competition have the same, relatively low degree of market power; they are all price makers. And in an oligopoly, two or more firms control the market without any significant influence in the industry. Prices in this market are moderate because of the presence of competition. When one firm sets a price, the others will do the same to remain competitive. But if one firm drops its price for consumers, the others typically follow suit.

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