Which of the following is a distinguishing characteristic of oligopoly?
A) Natural barriers cannot prevent the entry of new firms.
B) Each firm's actions influence the profits of all the other firms.
C) Firms are free to enter and exit the industry.
D) A large number of firms compete.

Question

Quizplus · Accepted Answer

Oligopoly is characterized by a market structure where a small number of firms have significant market power and where each firm's decisions (such as pricing, output, and advertising) affect the profits of the other firms in the industry. This interdependence is a key feature distinguishing oligopolies from other market structures.

Which of the Following Is a Distinguishing Characteristic of Oligopoly