The number of firms in an oligopoly must be
A)Four.
B)Large enough so that firms cannot coordinate.
C)Small enough so that one firm's decisions have a significant impact on the decisions of the other firms in the industry.
D)Small enough so that revenues are large enough to support advertising expenditures.

Question

Quizplus · Accepted Answer

In an oligopoly, the number of firms is small enough that each firm's decisions have a significant impact on the decisions of the other firms in the industry. This allows for strategic behavior and the potential for collusion or price-fixing. The actual number of firms may vary and is not necessarily limited to a specific number.

The Number of Firms in an Oligopoly Must Be