Question
Which helps enable an oligopoly to form within a market?
Costs of starting a competing business are too high.
The government restricts market entry.
The number of options in a market confuses consumers.
No competition exists between producers.
Costs of starting a competing business are too high.
The government restricts market entry.
The number of options in a market confuses consumers.
No competition exists between producers.
Answers
GPT-4o mini
The correct answer is:
**Costs of starting a competing business are too high.**
High entry costs can create barriers to entry, making it difficult for new firms to enter the market and compete. This can facilitate the formation of an oligopoly, where a small number of firms dominate the market. Other factors listed, such as government restrictions and confusion among consumers, can also influence market dynamics, but high start-up costs are a direct factor in enabling an oligopoly.
**Costs of starting a competing business are too high.**
High entry costs can create barriers to entry, making it difficult for new firms to enter the market and compete. This can facilitate the formation of an oligopoly, where a small number of firms dominate the market. Other factors listed, such as government restrictions and confusion among consumers, can also influence market dynamics, but high start-up costs are a direct factor in enabling an oligopoly.