Which of the following must be true in an oligopoly?
A)The firms produce a differentiated product.
B)There is one dominant firm in the market.
C)The firms are strategically interacting.
D)The market is international in scope.
E)There are no significant barriers to entry.

Question

Quizplus · Accepted Answer

Oligopoly refers to a market structure in which a small number of firms dominate the market. In an oligopoly, firms are strategically interacting with each other, meaning their decisions are influenced by the actions of their competitors. The other options (A, B, D, and E) do not necessarily have to be true in an oligopoly. For example, firms may produce a homogenous product, there may be no dominant firm, the market may be local rather than international, and there may be barriers to entry.

Which of the Following Must Be True in an Oligopoly