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Question
Macroeconomics
Posted 10 months ago
Which of the following lists shows the types of market ordered from highest to lowest price?
Choose 1 answer:
A perfect competition, oligopoly, monopoly
(B) monopoly, perfect competition, oligopoly
(C) oligopoly, perfect competition, monopoly
(D) perfect competition, monopoly, oligopoly
(E) monopoly, oligopoly, perfect competition
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Answer from Sia
Posted 10 months ago
Solution
a
Market Structures and Pricing: In economics, different market structures are known to influence the pricing of goods and services. Monopolies, being single suppliers, have the power to set prices higher due to lack of competition. Oligopolies, with few firms, may have high prices but typically less than monopolies due to some competitive pressure. Perfect competition, with many firms and free entry and exit, leads to prices that reflect the marginal cost of production, which is usually lower than in other market structures
Answer
(E) monopoly, oligopoly, perfect competition
Key Concept
Market Structure and Price Levels
Explanation
Monopolies can set the highest prices due to lack of competition, oligopolies have high but slightly more competitive prices, and perfect competition leads to the lowest prices as firms are price takers.
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