Sign up  |  Log in

Reading 15- Practice Question 19

Hi All,

Grateful if you could help on the below and advise why the question cannot be A or C?

Deep River Manufacturing is one of many companies in an industry that make a food product. Deep River units are identical up to the point they are labeled. Deep River produces its labeled brand, which sells for $2.20 per unit, and “house brands” for seven different grocery chains which sell for $2.00 per unit. Each grocery chain sells both the Deep River brand and its house brand. The best characterization of Deep River’s market is:

   A oligopoly.

   B perfect competition.

   C monopolistic competition.


Make the most of your CFA® Progam prep in one weekend! Join renowned instructors Peter Olinto & David Hetherington in May for a live, two-day intensive final review class.

Oligopoly has only few sellers so it cannot have “many companies”

 Monopolistic competition has differentiated products so it cannot have “Identical Products”


Hi Sid 1311,

Thanks for your reply. However for oligopoly qualified as few sellers is not clear. Please see below example :

In an industry comprised of three companies, which are small-scale manufacturers of an easily replicable product unprotected by brand recognition or patents, the most representative model of company behavior is:

  A  oligopoly.

  B perfect competition.

 C   monopolistic competition.

The answer could have been A based on the underlined words.

Awaiting your revert.