An oligopoly is a market that is characterized by:
A)one firm that totally dominates the supply of the product.
B)a large number of small firms all producing very similar products.
C)a few large sellers who dominate the market supply.
D)several small firms that compete primarily by differentiating their products.

Question

Quizplus · Accepted Answer

An oligopoly is a market where there are a few large sellers who dominate the market supply. These sellers may act in collusion, leading to higher prices and decreased competition. Option A is incorrect because the definition of an oligopoly precludes one firm dominating the supply. Option B is incorrect because an oligopoly is characterized by a few large firms, not many small ones. Option D is incorrect because differentiation of products is not a defining feature of an oligopoly.

An Oligopoly Is a Market That Is Characterized By