In which market structure do firms consider the actions of their rivals when setting prices and output?
A)monopoly
B)oligopoly
C)perfect competition
D)both monopoly and perfect competition
E)monopolistic competition

Question

Quizplus · Accepted Answer

In an oligopoly market structure, firms consider the actions of their rivals when setting prices and output. This is because there are only a few large firms that dominate the market, so the actions of one firm can greatly impact the profits of the others. In contrast, in a monopoly market structure, there are no close rivals, so firms do not need to consider their actions. In perfect competition, there are many small firms that cannot influence the market price. In monopolistic competition, while firms may consider the actions of their rivals, it is not as significant as in an oligopoly as there are many firms with differentiated products.

In Which Market Structure Do Firms Consider the Actions of Their