Question

A firm is operating in the United States with only two other competitors in the industry. a. It is likely this industry would be characterized as:

Answer 1

Answer: Oligopoly

Explanation:

In an Oligopolistic industry, the market is populated by few producers who control the market.

Oligopolistic industries have high barriers to entry because they usually benefit from economies of scale and so will require a huge cash outlay which still would not guarantee success as the other firms already have a firm grasp on the market.

If an industry has only 3 competitors as the one in the question, it is most likely an Oligopoly.