Both oligopoly and monopoly market structures tend to form if or when: the product, service or production processes do NOT involve patents or exclusively licensing. there are no production cost advantages when firms produce a large volume, in other words, no econom of scale high barriers to entry into an industry, such as large capital (K) capacity requirements and start-up costs, longstanding reputation or past mergers (consolidation of firms). each firm's product is identical, standardized and no different from other firms' product in the market.

An industry comprising 40 firms, none of which has more than 3 percent of the total market for a differentiated product, is an example of Multiple Choice   monopolistic competition.   oligopoly.   pure monopoly.   pure competition.

Step Two Respond to the following: Dunkin’ Donuts assumes you, like all the other locally-owned shops, will choose to close rather than compete and that they will have a monopoly on donut sales in your area. If they made that assumption, What quantity of donuts would they be most likely to sell to maximize profits? What price would they charge per donut? Review the 9.3 Donut Shop and Perfect Competition assignment. How do Dunkin’ Donuts’s production and pricing compare with the production and pricing of your area’s donut shops when there was a perfectly competitive market? What could Dunkin’ Donuts do to create barriers that would prevent others from entering the market and make it harder for you to remain in the market? If they take those measures, what could you do to remain in the market?

Suppose that the market for computers is dominated by a single firm, like IBM, that is able to exert influence over prices and output. This situation violates the perfect competition assumption of*many buyers and sellers.identical or homogeneous goods.ease of entry and exit.no differentiation. City hotels and restaurants are illustrative of*pure competition.monopolistic competition.oligopoly.monopoly.This characteristic of oligopoly implies that there is interdependence among firms that leads to conflicting motives, that leads them to act and react on the price movements of one another.*lack of uniformitycompetitionno unique patter of pricing behaviorinterdependence The actions of a firm in a purely competitive industry have no effect on market price; therefore, the demand curve faced by the firm is*unknown.a downward-sloping curve.a horizontal line at the level of the market price.a firm’s total revenue curve. A competitor maximizes profit by producing the output that*equates price…