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A key difference between monopoly and oligopoly is that: There are incentives to collude in monopoly, but not in an oligopoly. There are barriers to entry in monopoly, but not in an oligopoly. There is profit maximization in a monopoly but, no profit maximization in an oligopoly. There is one firm in a monopoly, but at least 2 in an oligopoly.

Ask by Barker Tyler. in the United States
Feb 19,2025

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There is one firm in a monopoly, but at least two firms in an oligopoly.

Solución

To analyze the key differences between monopoly and oligopoly, let's break down the statements provided: 1. **There are incentives to collude in monopoly, but not in an oligopoly.** - This statement is incorrect. In a monopoly, there is only one firm, so there is no need to collude. In an oligopoly, firms may have incentives to collude to maximize profits collectively. 2. **There are barriers to entry in monopoly, but not in an oligopoly.** - This statement is partially true. Monopolies typically have high barriers to entry, preventing other firms from entering the market. Oligopolies can also have barriers to entry, but they may not be as high as in a monopoly. 3. **There is profit maximization in a monopoly but no profit maximization in an oligopoly.** - This statement is misleading. Both monopolies and oligopolies aim to maximize profits, but the strategies they use may differ due to the number of firms and market dynamics. 4. **There is one firm in a monopoly, but at least 2 in an oligopoly.** - This statement is correct. A monopoly consists of a single firm that dominates the market, while an oligopoly consists of a few firms (at least two) that have significant market power. Based on this analysis, the most accurate statement that highlights a key difference between monopoly and oligopoly is: **There is one firm in a monopoly, but at least 2 in an oligopoly.**

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In a monopoly, a single firm dominates the entire market, wielding significant power over pricing and output levels. This firm holds a unique product or service, which creates high barriers to entry for potential competitors, making it nearly impossible for others to enter the market without significant investment or innovation. On the flip side, an oligopoly is characterized by a few firms controlling the market, which can lead to competitive behaviors or collusion among firms. In this environment, companies often monitor each other's actions closely and may engage in price fixing or market sharing strategies to maximize profits collectively, highlighting the dynamic interplay between competition and cooperation.

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