Which of the following statements accurately brings out the difference between monopolistic competition and an oligopoly?
A. Firms in an oligopoly have no pricing power; firms in a monopolistically competitive industry have the ability to raise prices.
B. In monopolistic competition, many firms compete against each other; in an oligopoly, there are few large firms competing against each other.
C. Sellers in an oligopoly provide highly differentiated products; in monopolistic competition, the products sold are undifferentiated or standardized.
D. In an oligopoly, the number of buyers is large; in monopolistic competition, the number of buyers is limited to three or four.
Answer: B
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