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) monopolistic competition.
C) a monopoly.
D) perfect competition.

Question

Quizplus · Accepted Answer

In an oligopoly, a few firms dominate the market, and each firm must consider the potential reactions of its competitors when making pricing and output decisions. This interdependence is a key characteristic of oligopolistic markets.

Consider a Market in Which Each Firm Must Predict the Price