Tesco operates in which market structure?Question 3Answera.Monopolistic Competitionb.Monopolyc.Oligopolyd.Perfect Competitione.None

Analysis of Tesco's Market Structure

1. Understanding Tesco's Business: Tesco is one of the largest supermarket chains in the UK and operates a range of stores including hypermarkets, supermarkets, and convenience stores.

2. Identifying Market Structure Characteristics:

   • Monopolistic Competition: This structure is characterized by many firms competing with similar, but not identical products. Tesco does have competition from multiple other supermarkets and retailers offering similar goods.
   • Monopoly: A single firm dominates the market with no direct competitors. This does not apply to Tesco as there are several other supermarket chains.
   • Oligopoly: A few firms have significant market control. While Tesco is a key player, it competes with other large chains like Sainsbury's and Asda.
   • Perfect Competition: Many firms sell identical products, and there are no barriers to entry. Tesco does not fit this mold due to brand differentiation and barriers in the grocery market.
   • None: This option would imply that Tesco does not fit into any traditional market structure.

3. Conclusion: Given that Tesco operates in a market with several competitors offering similar products but maintaining brand identity and loyalty, it fits best in the Monopolistic Competition category.

Final Answer

a. Monopolistic Competition