In what industry structure is the interdependence of firms a key characteristic?

Question

Quizplus · Accepted Answer

The interdependence of firms is a key characteristic of oligopoly. In an oligopoly, there are a small number of firms that dominate the market and their actions have a significant impact on the market price and the strategies of their competitors. This leads to firms constantly monitoring and responding to the actions of their competitors, creating a high level of interdependence. In perfect competition, firms are independent and do not have an impact on each other. In monopolistic competition, firms compete but do not have the same level of interdependence as in oligopoly. In a monopoly, there is only one firm, so interdependence is not a characteristic.

In What Industry Structure Is the Interdependence of Firms a Key