The defining characteristic of oligopoly is that each firm
A)produces the same output as its rivals
B)acts independently of its rivals
C)is mutually interdependent
D)is atomistic
E)advertises how its products are different from its rivals' products

Question

Quizplus · Accepted Answer

In an oligopoly market structure, firms are mutually interdependent, which means they consider the actions of their rivals before making any strategic decision. They are aware that their actions can have an impact on their rivals, so they must take into account the possible reactions of their competitors. This mutual interdependence is the defining characteristic of an oligopoly market structure.

The Defining Characteristic of Oligopoly Is That Each Firm