In oligopoly,a firm must realize that:
A) what it does has no effect on the other firms in the industry.
B) its behaviour will be ignored by other firms in the industry.
C) another major firm may dominate choices in the industry,and it will have to behave accordingly.
D) collusion was made legal in 2014.

Question

Quizplus · Accepted Answer

In oligopoly, another major firm may have significant influence on the choices the firm makes. This is because a few major firms dominate the industry, and their actions will have an impact on the entire market. Therefore, a firm must behave in a way that takes into consideration the actions of its competitors and the dominant players in the market. Options A and B are incorrect as a firm's behavior will have an impact on the industry, and other firms will not ignore it. Option D is incorrect as collusion is still illegal in most countries, and its legality does not change the fact that firms need to make strategic decisions based on the actions of their competitors.

In Oligopoly,a Firm Must Realize That