Question

A firm produces either a homogeneous or a differentiated product in ______.

Options

• oligopoly

• monopsony

• perfect competition

• monopolistic competition

Answer 1

A firm produces either a homogeneous or a differentiated product in oligopoly.

Explanation:

In an oligopoly (few sellers) firms may produce either homogeneous (pure oligopoly, e.g., cement, steel) or differentiated products (differentiated oligopoly, e.g., cars, refrigerators); by contrast, perfect competition involves homogeneous goods, monopolistic competition involves differentiated goods, and monopsony describes a single buyer rather than a product type.