Oligopoly is a market structure characterized by:
A) a horizontal demand curve.
B) a large number of small firms.
C) interdependence in decisionmaking.
D) relatively easy entry and exit.

Question

Quizplus · Accepted Answer

Oligopoly is characterized by interdependence in decision-making, meaning that each firm's actions have an impact on the other firms in the industry. This is different from perfect competition where firms are price takers and have no impact on the market price. A horizontal demand curve is characteristic of perfect competition, not oligopoly. A large number of small firms is characteristic of a competitive market structure, not oligopoly. Relatively easy entry and exit is also characteristic of a competitive market structure, not oligopoly.

Oligopoly Is a Market Structure Characterized By