Clear-cut mutual interdependence with respect to the price-output policies exists in

Question

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In an oligopoly market, there are only a few large firms that dominate the market, and their decisions regarding output and pricing have a significant impact on the market as a whole. The interdependence among these firms is high because any action taken by one firm is likely to have a significant effect on the other firms in the market. Therefore, in oligopoly, there is a clear-cut mutual interdependence with respect to the price-output policies. In pure competition or monopolistic competition, there are a large number of small firms that operate independently, and their actions do not have a significant impact on the market. In pure monopoly, there is only one firm in the market, and its decisions are not influenced by other firms.

Clear-Cut Mutual Interdependence with Respect to the Price-Output Policies Exists