Oligopoly is a market structure characterized by:
A) independence in decisionmaking.
B) uncertainty about the interaction of rival firms.
C) substantial diseconomies of scale.
D) a large number of small firms.

Question

Quizplus · Accepted Answer

Oligopoly is a market structure where a few large firms dominate the market and interact with each other in setting prices and making decisions. This interaction leads to uncertainty about the behavior of rivals, as their actions can have a significant impact on the other firms in the market. Therefore, option B is the best choice. Options A, C, and D are incorrect as independence in decision making is more characteristic of a perfectly competitive market, substantial diseconomies of scale are more typical of a monopoly, and a large number of small firms is more associated with a perfectly competitive market or monopolistic competition.

Oligopoly Is a Market Structure Characterized By