Question

Which of the following is most likely to be an oligopolist (a firm competing in the market structure known as oligopoly)?

		A small milk farmer
		One of only a few major beer companies in a market, like Budweiser
		A restaurant like Lazy Janes
		A pharmaceutical company producing a patented drug

Answer 1

Oligopoly is a market structure where-

1.there are few large sellers and large number of buyers.

2.There are barrier to entry and exit in the market .

3.long term economic cost is zero .

4.They form carte to have price control and market control .

so in the given option ,option B which says that only few major beer companies in the market has the market power of price control ,so they will come under the oligopoly .

A small milk farmer will not come under oligopoly .

A pharmaceutical company who produces a patented drug and will come under Monopoly.

answer is option B