What is the most important characteristic of oligopoly?

Question

Quizplus · Accepted Answer

The most important characteristic of oligopoly is the interdependence of profits among firms. In an oligopoly, firms must consider the reactions of their competitors when making pricing and production decisions, as they are few in number and have a large impact on the market. This interdependence leads to strategic behavior and can result in collusion or non-price competition. While firms in an oligopoly may have market power and engage in product differentiation, these characteristics are not unique to oligopoly and can be present in other market structures as well. Low barriers to entry also do not necessarily apply to oligopoly, as it can be difficult for new firms to enter a market with few incumbent players.

What Is the Most Important Characteristic of Oligopoly