Answer to Question #323786 in Microeconomics for rubaiya

Question

Which industries are highly competitive, give local examples? What are the three types of firm and in which sectors is each type most prominent?

Answer 1

Highly competitive industries include automobiles, airlines, and clothing. The three types of firms include;

Perfect competition; It is a market structure under the operation of ideal conditions. It constitutes a large number of buyers and sellers. They are price takers since the firms compete. The products within the market are homogenous.

Monopolistic competition; This firm is constituted of small firms competing against each other. Their products are similar but differentiated by style or branding. There is the ease of entry and exit into the market.

Oligopoly; is a market structure consisting of a small number of firms that jointly are influential over a given market. They have market power, and no firm within the group can undermine the market share.