A defining characteristic of an oligopoly is:

Question

Quizplus · Accepted Answer

One of the defining characteristics of an oligopoly is that there are only a few large firms with market power in the industry. This causes the firms to be aware of their competition with each other and can lead to strategic behavior, such as price collusion or product differentiation. A is incorrect because while barriers to entry may exist in an oligopoly, they do not necessarily prevent newcomers from entering the industry. C is incorrect because in an oligopoly, long-run profits are possible but may be limited by the behavior of the other firms in the industry. D is incorrect because while some oligopolies may sell a standardized product, others may have differentiated products.

A Defining Characteristic of an Oligopoly Is