Reading 15- Practice Question 19

[archived_user]

Hi All,
Grateful if you could help on the below and advise why the question cannot be A or C?
Deep River Manufacturing is one of many companies in an industry that make a food product. Deep River units are identical up to the point they are labeled. Deep River produces its labeled brand, which sells for $2.20 per unit, and “house brands” for seven different grocery chains which sell for $2.00 per unit. Each grocery chain sells both the Deep River brand and its house brand. The best characterization of Deep River’s market is:
A oligopoly.
B perfect competition.
C monopolistic competition.
Thanks

 

[archived_user]

Oligopoly has only few sellers so it cannot have “many companies”
Monopolistic competition has differentiated products so it cannot have “Identical Products”
Cheers!

 

[archived_user]

Hi Sid 1311,
Thanks for your reply. However for oligopoly qualified as few sellers is not clear. Please see below example :
In an industry comprised of three companies, which are small-scale manufacturers of an easily replicable product unprotected by brand recognition or patents, the most representative model of company behavior is:
A oligopoly.
B perfect competition.
C monopolistic competition.
The answer could have been A based on the underlined words.
Awaiting your revert.
Thanks