The competitive market situation in which the few sellers are sensitive to one another's prices is called:
A)pure monopoly.
B)oligopoly.
C)monopolistic competition.
D)pure competition.

Question

Quizplus · Accepted Answer

In an oligopoly market situation, there are only a few sellers who are aware of each other's prices and strategies. They tend to follow each other's pricing decisions, and any change in prices by one seller can affect the others' profits. Therefore, they tend to compete on non-price factors like quality, features, and marketing strategies. This makes oligopoly different from pure competition and monopolistic competition. Pure monopoly is a market situation where there is only one seller, while monopolistic competition is a situation with many sellers who offer differentiated products.

The Competitive Market Situation in Which the Few Sellers Are