One of the key characteristics of oligopoly is that
A)firms are independent of each other.
B)firms face different cost conditions.
C)each firm is aware that its actions will influence other firms and that the actions of the other firms affect it.
D)it is easy to enter the industry.

Question

Quizplus · Accepted Answer

One of the main features of oligopoly is that firms are interdependent, meaning they are aware of the fact that their actions will affect other firms in the industry and that the actions of other firms will have an impact on them as well. This interdependence can lead to strategic behavior, such as price leadership or collusion, as firms try to maximize their profits while taking into account the reactions of their competitors. The other options listed are not necessarily true of oligopoly - firms in an oligopoly can have similar cost conditions, and it may be difficult to enter the industry due to barriers to entry.

One of the Key Characteristics of Oligopoly Is That