Question

Market in which there are very few producers (or) sellers of a commodity is:

• A. Oligopoly
• B. Monopoly
• C. Monopolistic
• D. Perfect

Hint:

Exam Tip: Remember the Greek roots: "Mono" = one, "Oligo" = few, "Poly" = many. This helps classify market structures based on the number of firms.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
This question tests the classification of market structures based on the number of producers and the level of competition.

Step 2: Defining Market Structures:
Let's define the key market structures:

• Perfect Competition: Many buyers and sellers, homogeneous products, free entry and exit.
• Monopoly: A single seller, unique product, high barriers to entry.
• Monopolistic Competition: Many sellers, differentiated products, relatively easy entry and exit.
• Oligopoly: A few large sellers, products can be homogeneous or differentiated, significant barriers to entry. The keyword "very few producers" directly points to oligopoly.

Step 3: Analyzing the Options:
The question states that there are "very few producers (or) sellers."

• (A) Oligopoly: Matches the description perfectly. "Oligo" means few, and "poly" means sellers.
• (B) Monopoly: Has only one seller.
• (C) Monopolistic: Has many sellers.
• (D) Perfect: Has many sellers.

Step 4: Final Answer:
A market with very few producers is an oligopoly. Therefore, option (A) is correct.