To be called an oligopoly,an industry must have:
A)independence in decision making.
B)a horizontal demand curve.
C)a small number of interdependent firms.
D)relatively easy entry and exit.

Question

Quizplus · Accepted Answer

An oligopoly is a market structure where a small number of large firms dominate the industry. The key characteristic of an oligopoly is that the firms are interdependent upon one another, meaning that a decision made by one firm can have a significant impact on the other firms in the industry. Therefore, choice C is the best answer as it states that an oligopoly contains a small number of interdependent firms. The other choices are incorrect as A) independence in decision making is not a characteristic of an oligopoly, B) a horizontal demand curve is more characteristic of a perfectly competitive market, and D) oligopolies typically have high barriers to entry and exit, making it difficult for new firms to enter the market.

To Be Called an Oligopoly,an Industry Must Have