Consider the following statements. 1. Monopolistic competition is characterised by full control over price. 2. In monopoly, the product may or may not be homogeneous. 3. Perfect mobility of the factors is the characteristic of oligoploy. Which of the statement(s) given above is/are correct?

[amp_mcq option1=”Only 1″ option2=”Only 2″ option3=”Only 3″ option4=”None of the above” correct=”option4″]

The correct answer is D. None of the above.

1. Monopolistic competition is characterized by a large number of firms selling differentiated products. Firms in monopolistic competition have some control over price, but they are not price-makers like monopolies.
2. In monopoly, there is only one firm in the market. The firm has a great deal of control over price, and it can charge a price above marginal cost.
3. Oligopoly is a market structure with a small number of firms. Firms in oligopoly have some control over price, but they are not price-makers like monopolies. They must take into account the reactions of their rivals when they set prices.

Perfect mobility of the factors is not a characteristic of any of the market structures listed above.