In an oligopoly:
A)there are many sellers.
B)there are no barriers to entry.
C)the actions of one firm depend on the actions of other firms
D)firms produce an output at which MR P.

Question

In an oligopoly:
A)there are many sellers.
B)there are no barriers to entry.
C)the actions of one firm depend on the actions of other firms
D)firms produce an output at which MR> P.

Quizplus · Accepted Answer

An oligopoly is a market structure in which a few large firms dominate the market, and their actions depend on each other. This is because each firm's decision affects the market conditions and the outcomes for all other firms. Therefore, the actions of one firm depend on the actions of other firms, making C the correct answer. A is incorrect since there are only a few large firms in an oligopoly. B is incorrect since there are barriers to entry in an oligopoly, which make it difficult for new firms to enter the market. D is incorrect since firms in an oligopoly may produce at a level where MR is less than P, as they consider the impact of their production on the overall market conditions.

In an Oligopoly