Question

General Motors operates several divisions in supplying cars, trucks, vans, and SUVs to its customers. Each division engages the usual business participants, overlaps management functions with other divisions, and works in basically the same functional areas as all of the others. Chevrolet, Pontiac, Oldsmobile, Cadillac, Saturn, and GMC trucks are among the company's product lines. Its few major competitors include Ford, DaimlerChrysler, Nissan, Honda, and Toyota. Each automaker sells a large portion of all the products sold in the marketplace, and each differentiates its product lines. If the automobile industry included many rather than few manufacturers of differentiated their products, we might conclude that it was characterized by _____ conditions.
(a) Bipolistic
(b) Monopolistic
(c) Multipolistic
(d) None of the above

Answer 1

Answer: Monopolistic

             

Explanation: In simple words, monopolistic refers to a structure under which the industry constitutes many producers that sells differentiated products and no one product is the perfect substitute of the other.

In the given case, the firms are few but they are manufacturing slightly different automobiles for the customers so that they can build a brand image and customer loyalty.

Hence from the above we can conclude that the correct option is B.