An industry dominated by a few firms, where each of those firms recognizes that its own choices will affect the choices of its rivals and that its rivals' choices will affect it, is a(n):
A) monopoly.
B) oligopoly.
C) monopolistic competition.
D) perfect competition.

Question

Quizplus · Accepted Answer

An oligopoly is an industry where a few firms dominate the market and their decisions significantly affect each other. This leads to interdependence among firms and strategic behavior, such as price-fixing, collusion, and non-price competition. Monopoly refers to a single seller controlling the entire market, while monopolistic competition involves many firms selling differentiated products with some degree of market power. Perfect competition, on the other hand, assumes numerous small firms selling identical products with no entry barriers, no market power, and perfect information.

An Industry Dominated by a Few Firms, Where Each of Those