In oligopoly, a firm must realize that:
A)what it does has no effect on the other firms in the industry.
B)its behavior will be ignored by other firms in the industry.
C)another major firm may dominate choices in the industry, and it will need to behave accordingly.
D)collusion was made legal in 2004.

Question

Quizplus · Accepted Answer

In an oligopoly, there are a small number of firms dominating the market. This means that each firm needs to be aware of the actions of the others and adjust its behavior accordingly. Another major firm may have significant impact on the industry, so it is important for the firm to be strategic in its decision-making. A and B are not true statements as the actions of one firm can have significant impact on the others, and collusion is illegal. D is not a correct response.

In Oligopoly, a Firm Must Realize That