question archive Siyed, an economics student, believes that a beer sold by one particular shack on the beach is completely different from an identical beer produced by the same factory and sold by the luxury hotel adjacent to the shack
Siyed, an economics student, believes that a beer sold by one particular shack on the beach is completely different from an identical beer produced by the same factory and sold by the luxury hotel adjacent to the shack
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Siyed, an economics student, believes that a beer sold by one particular shack on the beach is completely different from an identical beer produced by the same factory and sold by the luxury hotel adjacent to the shack. Siyed most likely thinks that:
a. the luxury hotel and the shack are in a perfectly competitive industry.
b the luxury hotel and the shack are in a monopolistically competitive industry.
c. the luxury hotel is a monopoly seller of the beer.
d. while beer is homogeneous, the product is differentiated among the sellers.
e. the shack is in a perfectly competitive industry, but the luxury hotel is in an oligopoly industry.
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e. the shack is in a perfectly competitive industry, but the luxury hotel is in an oligopoly industry
Although the product sold is homogeneous in nature, but the position of sellers differ. There are lots of shacks on the beach, but the luxury hotels would be few. The maintenance of shack requires negligible expenditures, whereas the luxury hotel would require huge investment expenditures. Hence, shacks are a perfectly competitive industry, whereas luxury hotels are the parts of an oligopoly market.
