Question

Assertion (A): The cellular industry is an example of monopolistic competition.

Reason (R): In the cellular industry, there are 3-5 dominant firms (Airtel, Vodafone, Jio etc.)

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true but Reason (R) is false.

• Assertion (A) is false but Reason (R) is true.

Answer 1

Assertion (A) is false but Reason (R) is true.

Explanation:

The assertion is false because the cellular industry exemplifies an oligopolistic market structure rather than monopolistic competition. The reason is true that an oligopoly is defined clearly as the presence of a few (3 to 5) dominant corporations, such as Jio, Airtel, and Vodafone Idea, that control the vast majority of the market share.