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Which of the following best states the main difference between …

  • Question 16a of 25 - Market structures

  • Maximum Attempts: 1
  • Question Type: Multiple Choice
  • Maximum Score: 2
  • Question: Which of the following best states the main difference between a monopoly and monopolistic competition?
  • Answers:
  1. Monopolies involve a much lower level of competition than monopolistic competition.
  2. Monopolistic competition involves corporations and oligopolies while monopolies involve only corporations.
  3. Monopolistic competition involves slightly differentiated products while monopoly involves a single product.
  4. Both monopolies and near monopolies can exist with a certain low level of competition.

The correct answer is: Monopolistic competition involves slightly differentiated products while monopoly involves a single product. In a monopoly, there is only one product offered by one seller, while a monopolistic competition has many very similar but slightly different products.

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