Consider a market in which each firm must predict the price and quantity decisions of other firms, as well as how those price and quantity decisions will affect the first firm's revenue and profit. This market is BEST described as
A) an oligopoly.
B) perfect competition.
C) a monopoly.
D) monopolistic competition.

Question

Quizplus · Accepted Answer

In an oligopoly, a few firms dominate the market, and each firm's decisions regarding price and output can significantly affect the market conditions and the profits of other firms. This interdependence requires firms to predict competitors' actions.

Consider a Market in Which Each Firm Must Predict the Price