Questions: The interviewee says that Apple and Samsung, "are the only two companies that are really selling smartphones at this point." One can infer from this that Apple and Samsung are operating under which of the following competitive structures? a. Monopoly b. Pure competition c. Oligopoly d. Socialistic competition e. Monopolistic competition

The interviewee says that Apple and Samsung, "are the only two companies that are really selling smartphones at this point." One can infer from this that Apple and Samsung are operating under which of the following competitive structures? a. Monopoly b. Pure competition c. Oligopoly d. Socialistic competition e. Monopolistic competition
Transcript text: The interviewee says that Apple and Samsung, "are the only two companies that are really selling smartphones at this point." One can infer from this that Apple and Samsung are operating under which of the following competitive structures? a. Monopoly b. Pure competition c. Oligopoly d. Socialistic competition e. Monopolistic competition
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Solution

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Answer

The answer is c. Oligopoly

Explanation
Option 1: Monopoly

A monopoly exists when a single company dominates the entire market for a particular product or service. Since the interviewee mentions two companies, Apple and Samsung, this option is not applicable.

Option 2: Pure competition

Pure competition is a market structure characterized by a large number of small firms, none of which can control the market price. This does not fit the scenario described, as only two companies are mentioned.

Option 3: Oligopoly

An oligopoly is a market structure where a small number of firms have significant market power and dominate the market. The statement that Apple and Samsung are the only two companies really selling smartphones suggests that they are the dominant players in the market, fitting the definition of an oligopoly.

Option 4: Socialistic competition

Socialistic competition is not a recognized market structure in economic theory. Therefore, this option is not relevant.

Option 5: Monopolistic competition

Monopolistic competition is a market structure where many firms sell products that are similar but not identical. Given that the interviewee highlights only two dominant companies, this option does not apply.

Therefore, the most appropriate competitive structure for Apple and Samsung in this context is an oligopoly.

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