In oligopoly, the number of firms is such that
A)oligopoly typically results in competition.
B)oligopoly is essentially the same as monopoly.
C)most are quickly eliminated and a monopoly results.
D)product differentiation is not possible.
E)each firm recognizes its own and others' market power.

Question

Quizplus · Accepted Answer

In oligopoly, there are only a few firms in the market, and each firm recognizes its own and others' market power. This recognition of interdependence and the ability to affect market outcomes is what sets oligopoly apart from other market structures. The other options, such as the idea that oligopoly leads to competition or that it is the same as monopoly, are not necessarily true or applicable to all oligopolistic markets.

In Oligopoly, the Number of Firms Is Such That