Eon Inc., Electravia Inc., and FC Inc., the three largest firms in the consumer electronics industry, hold close to 85 percent of the industry's market share. These companies mainly compete against each other by providing unique features in their products rather than pricing them low. These firms are interdependent, and each firm must consider the strategic actions of its competitors. Which of the following industry competitive structures does this scenario best illustrate?1) Monopolistic competition2) Oligopoly3) Monopoly4) Perfect competition

Question

Business

Kayley Roman

3 October, 12:45

Eon Inc., Electravia Inc., and FC Inc., the three largest firms in the consumer electronics industry, hold close to 85 percent of the industry's market share. These companies mainly compete against each other by providing unique features in their products rather than pricing them low. These firms are interdependent, and each firm must consider the strategic actions of its competitors. Which of the following industry competitive structures does this scenario best illustrate?1) Monopolistic competition2) Oligopoly3) Monopoly4) Perfect competition

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Answers (1)

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Liliana Davenport · Answer 1

2. Oligopoly

Explanation:

There are only several (three) main firms capturing the majority of market share, none of which can avoid the significance of others' strategy. That is the definition of oligopoly

It is not

monopoly (one company), perfect competition (really numerous sellers having no control on price) or monopolistic competition (many company having small power)