An industry comprised of a small number of firms,each of which considers the potential reactions of its rivals in making price-output decisions,is called:
A) monopolistic competition.
B) oligopoly.
C) pure monopoly.
D) pure competition.

Question

Quizplus · Accepted Answer

An industry comprised of a small number of firms that consider the potential reactions of their rivals is called an oligopoly. In this industry, the pricing and output decisions of one firm have a significant impact on its rivals, and vice versa. Therefore, firms in oligopolistic markets often engage in strategic behavior to gain a competitive advantage. Monopolistic competition is a market structure characterized by many firms selling differentiated products, while pure monopoly exists when a single firm dominates an industry. Pure competition is a theoretical market structure in which many small firms supply an identical good or service.

An Industry Comprised of a Small Number of Firms,each of Which