Which one of the following characteristics applies to oligopolistic markets?
A)There is free entry of firms.
B)Firms are so large relative to the market that they do not have to consider the behaviour of other firms.
C)Firms are mutually independent because there are many firms in the industry.
D)Firms have to consider the behaviour of other firms because all firms are large relative to the size of the market.
E)Economic profit of each firm equals zero.

Question

Quizplus · Accepted Answer

Oligopolistic markets are characterized by a small number of large firms, which means that each firm's actions can have a significant impact on the behavior and profits of the other firms. Therefore, firms must consider the behavior of their competitors when making decisions about pricing, production, and other aspects of their business strategy. Options A, B, and E are not applicable to oligopolistic markets, as firms tend to face barriers to entry, are interdependent, and may earn economic profits in the long run. Option C is not accurate, as firms in oligopolistic markets are mutually interdependent rather than independent.

Which One of the Following Characteristics Applies to Oligopolistic Markets