Which situation could be the best example of an oligopoly?

1) A new producer of power tools has entered the market and is relying on low prices to attract consumers.

2) A new producer of computers has entered the market and found that advertising is more useful than lowering prices.

3) A new producer of running shoes is trying to enter the market but cannot because of an existing patent.

4) A new producer of tires has entered the market and found that demand is already being met.

Question

Social Studies

Osborn

10 December, 03:34

Which situation could be the best example of an oligopoly?

1) A new producer of power tools has entered the market and is relying on low prices to attract consumers.

2) A new producer of computers has entered the market and found that advertising is more useful than lowering prices.

3) A new producer of running shoes is trying to enter the market but cannot because of an existing patent.

4) A new producer of tires has entered the market and found that demand is already being met.

+1

Answers (2)

Know the Answer?

Dania Waters · Answer 1

Oligopoly is the type of market that has few number of firms but controls the market for a certain service or product. An example would be the auto industry - Chrysler, GMC, and Ford. So the best example in the question above is 2. Since it is setting a price to maximize output level rather than lowering the price.

Lukas Cherry · Answer 2

A new producer of computers has entered the market and found that advertising is more useful than lowering prices.