Answer to Question #328188 in Microeconomics for toa

Question

4. a. Name a product that has a price that adjusted very frequently in the last year. Explain why.                 

b. What is the difference between monopolistic competition and oligopoly? Explain with local   examples. 

Answer 1

a. Volatility product (for example, oil price)

b. In monopolistic competition, there are a lot of firms, but product is diversified (for example market of retail shops or restaurant). In oligopoly there are only two firms (for example Airbus and Boeing)