A common characteristic of oligopolies is:
A) interdependence in pricing decisions.
B) independent pricing decisions.
C) low industry concentration.
D) few or no plant-level economies of scale.

Question

Quizplus · Accepted Answer

Interdependence in pricing decisions is a key characteristic of oligopolies, as firms must consider the potential reactions of their competitors when making pricing decisions. This can lead to strategic behavior and collusion among firms in the industry. Independent pricing decisions (B) are more characteristic of monopolistic competition, where there are many small firms that have limited market power. Low industry concentration (C) may be true in some oligopolies, but it is not a defining characteristic. Few or no plant-level economies of scale (D) do not necessarily apply to oligopolies, as these firms may still benefit from economies of scale in production.

A Common Characteristic of Oligopolies Is