The five largest firms in a market have output shares of 18%, 16%, 15%, 14%, and 12%. If one of these firms changes its price or product features, the sales of the other firms are noticeably affected. This _____ is associated with the market structure of _____.

Question

Quizplus · Accepted Answer

Mutual interdependence, where the actions of one firm significantly impact the others, is a characteristic of oligopolies, a market structure defined by a small number of firms dominating the market.

The Five Largest Firms in a Market Have Output Shares