In which market model is there mutual interdependence?
A) monopolistic competition
B) pure competition
C) pure monopoly
D) oligopoly

Question

Quizplus · Accepted Answer

In an oligopoly market, there are few dominant firms that produce a significant portion of the total output in the industry. Due to the limited number of firms, the actions taken by one firm can have a significant impact on the others. Therefore, there is mutual interdependence as each firm must take into account the potential reactions of its competitors when making business decisions. In contrast, monopolistic competition and pure competition do not involve mutual interdependence because there are numerous small firms that operate independently, while pure monopoly involves a single dominant firm with no competitors.

In Which Market Model Is There Mutual Interdependence