The mutual interdependence that characterizes an oligopoly arises because:
A)the products of various businesses are standardized
B)the products of various businesses are differentiated
C)there is only one business in the market
D)entry barriers are insignificant
E)a small number of businesses make up the market

Question

Quizplus · Accepted Answer

An oligopoly is a market structure characterized by a small number of dominant firms, making it difficult for new firms to enter the market. This results in mutual interdependence because each firm's actions and decisions affect the others, leading to strategic decision-making and potential cooperation or conflict between them. Therefore, choice E, "a small number of businesses make up the market," best describes the reason for mutual interdependence in an oligopoly.

The Mutual Interdependence That Characterizes an Oligopoly Arises Because