Question

Two sellers is a special case of which type of market?

• A. Perfect competition
• B. Monopoly
• C. Oligopoly
• D. None of these

Hint:

In an oligopoly, the market is controlled by a few sellers, which can lead to significant interdependence among them.

Answer 1

The Correct Option is C

Step 1: Understanding market structures.
In economics, market structures are categorized based on the number of firms in the market and the nature of competition. In an oligopoly, a market is dominated by a small number of sellers. This makes it a special case of a market where only two sellers exist.

Step 2: Analyzing the options.
(A) Perfect competition: In perfect competition, there are many firms in the market, all selling identical products. This does not apply to the case of two sellers.
(B) Monopoly: A monopoly is a market structure where only one seller exists. This does not fit the scenario of two sellers.
(C) Oligopoly: Correct. An oligopoly is a market structure in which a small number of sellers dominate the market. Two sellers are a special case of this.
(D) None of these: This is incorrect, as the correct answer is (C) Oligopoly.

Step 3: Conclusion.
Two sellers represent an oligopoly, a market structure where a few firms dominate. Therefore, the correct answer is (C) Oligopoly.