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Question
Read the given statements carefully and select the correct option.
- The number of sellers under oligopoly are small.
- In monopolistically competitive markets, buyers and sellers have perfect knowledge about the market conditions.
Options
Both A and B are true
Both A and B are false
A is true, B is false
A is false, B is true
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Solution
A is true, B is false
Explanation:
- Statement A is true: An oligopoly is a market structure dominated by a small number of large sellers who have a sizable market share and are highly interdependent.
- Statement B is false: In a monopolistically competitive market, buyers and sellers have incomplete knowledge due to considerable product differentiation and heavy branding, making direct comparisons impossible. Perfect market knowledge is exclusively a feature of perfect competition.
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