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

Question

Quizplus · Accepted Answer

In an oligopoly, the behavior of one firm can affect the profits of the others. This interdependence is a distinguishing characteristic of an oligopoly market structure. Options B and C are incorrect as they describe outcomes that are not typical of an oligopoly market. Option D is incorrect as at least one statement is true about an oligopoly.

One of the Defining Characteristics of an Oligopoly Is That