The market for hand tools (such as hammers and screwdrivers) is dominated by Draper Stanley, and Craftsman This market is best described as ?
Correct answer: C. an oligopoly
- A. monopolistically competitive
- B. a monopoly
- C. an oligopoly
- D. competitive
Explanation
A market dominated by a few major firms, such as the named hand-tool producers, is an oligopoly. The defining feature is the small number of powerful sellers and their strategic interdependence.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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