Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

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Prepare for the Texas Real Estate SAE Exam with our educational quiz. Study using flashcards and multiple choice questions, each with detailed explanations to ensure you're ready to pass your exam!

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What type of market structure involves a few competitors remaining in the market?

Monopoly
Oligopoly
Vertical Expansion
Market Penetration

The correct answer is: Oligopoly

The correct answer is oligopoly because this market structure is characterized by a small number of firms that dominate the market. In an oligopoly, these firms have substantial market power and can influence prices and output levels, but each firm must also consider the potential reactions of its competitors when making decisions. This interdependence is a defining feature, as the actions of one firm directly affect the others in the market. Monopolies, on the other hand, involve a single firm that controls the entire market for a product or service, eliminating competition. Vertical expansion and market penetration are strategies rather than market structures and do not describe competitive dynamics as oligopoly does. Vertical expansion refers to the practice of acquiring businesses at different stages of production, while market penetration is a strategy aimed at increasing market share within an existing market. Thus, oligopoly is the most appropriate choice that reflects the presence of a few competing firms within the market.