The competitive market situation in which the few sellers are sensitive to one another's prices is called:

Question

Quizplus · Accepted Answer

An oligopoly is a market situation where a few large sellers dominate the market and are sensitive to each other's pricing decisions. This leads to interdependence among the sellers and they need to consider their competitors' actions while making decisions. Hence, option D is the correct answer. Option A is incorrect as monopolistic competition is a market situation where there are many small firms selling differentiated products, and they do not have significant pricing power. Option B is incorrect as pure monopoly is a situation where one firm dominates the market and has complete pricing power. Option C is incorrect as pure competition is a market situation where there are many small firms selling identical products, and they do not have significant pricing power.

The Competitive Market Situation in Which the Few Sellers Are