Which of the following characteristics distinguishes oligopoly from other market structures?

Question

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Interdependence among firms in the industry is a distinguishing characteristic of oligopoly. In an oligopoly market structure, there are only a few dominant firms that can directly influence the prices of goods and services in the market. The actions taken by one firm in terms of pricing, marketing or product development can have a direct impact on the other firms in the industry. This interdependence leads to strategic behaviors such as collusion or price wars that are not seen in other market structures like perfect competition or monopolistic competition. The other choices are characteristics of other market structures, for example, differentiated products distinguish monopolistic competition from perfect competition.

Which of the Following Characteristics Distinguishes Oligopoly from Other Market