question archive Which type of competition is characterized by a small number of firms, homogeneous products and costly entry and exit? A) perfect competition B) monopolistic competition C) oligopoly D) monopoly
Which type of competition is characterized by a small number of firms, homogeneous products and costly entry and exit? A) perfect competition B) monopolistic competition C) oligopoly D) monopoly
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Which type of competition is characterized by a small number of firms, homogeneous products and costly entry and exit?
A) perfect competition
B) monopolistic competition
C) oligopoly
D) monopoly
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Option C) oligopoly is correct
This option is correct because an oligopoly is a market in which few firms sell homogeneous products. They are rivals, that means they follow the strategy of charging low price in the market. There are barriers to entry or exit of new firms, which means new firms cannot easily enter the industry because existing firms dominate an industry.
