Question

In which type of industry do you think customers would prefer to buy products, and why? (Choose one below and explain your reasoning.) Option A: In an industry dominated by a Monopoly. Option B: In an industry characterized by Pure Competition.

Answer 1

B) In an industry characterized by pure competation.

When compare to Monopoly market to Perfect competation market under perfect market consumers are benefited due to following the reasons

1. The Price paid to the product by the consumer is equal to the MC of the product whereas in monopoly market is price is greater than the marginal cost
2. In monopoly market, consumers do not have substitution of goods choice only one good available whereas in perfect competation consumer has more choice of goods
3. In the perfect market supply of goods is more firm will produce up to optimum size whereas in the monopoly market firm will produce output less than optimum size.

Thus it is clear that consumers prefer to buy product more from the perfect market than the monopoly market.