Question

What market structure is best able to handle a demand shock such as the coronavirus pandemic?

Answer 1

An Oligopoly market structure would be the most effective in the COVID-19 pandemic.

Unlike prefect competition or monopolistic competition, the number of players will be limited . Which will allow better control of movement of goods and resources, with a limited number of individuals working in.

Oligopolies have comparatively large firms, which should be able to meet the demand for essentials for the general public.

Unlike monopolies, there will be a certain level of competition among the limited number of firms, which should regulate prices at economically fair level for consumers.

If required external intervention would be easier for the government, incase price and supply regulations are required.

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