The only market structure in which there is significant interdependence among firms with regard to their pricing and output decisions is
A)Monopolistic competition.
B)Monopoly.
C)Oligopoly.
D)Perfect competition.

Question

Quizplus · Accepted Answer

In an oligopoly market structure, there are a limited number of firms competing against each other. Due to the small number of firms, the actions of one firm can have a significant impact on the other firms. This leads to interdependence among firms with regard to their pricing and output decisions. In Monopolistic competition and Perfect competition, there are too many firms for any one firm to have a significant impact on the market. In a Monopoly, there is only one firm, so there is no interdependence among firms.

The Only Market Structure in Which There Is Significant Interdependence