One of the defining characteristics of an oligopoly is that:
A)one firm's behavior can affect the others' profits.
B)all firms act in unison to create a perfectly competitive outcome.
C)all firms act in unison to create a monopoly outcome.
D)None of these statements is true.

Question

Quizplus · Accepted Answer

In an oligopoly, there are a small number of firms in the market, and each firm's behavior can impact the profits of the others. This interdependence is a defining characteristic of oligopolies. Choices B and C are incorrect because oligopolies do not act like perfectly competitive or monopolistic markets. Choice D is incorrect because the statement in choice A is true.

One of the Defining Characteristics of an Oligopoly Is That