In oligopoly, any action by one firm to change price, output, or quality causes
A) a reaction by other firms.
B) no reaction from the other firms.
C) a profit gain for the other firms.
D) loss of market share by the acting firm.

Question

Quizplus · Accepted Answer

In oligopoly, firms are interdependent and any action taken by one firm to change price, output or quality will be noticed and reacted to by other firms in the market. The reaction could come in the form of a price war or an adjustment in their own pricing or output to maintain their market share. Therefore, choice A is the correct option.

In Oligopoly, Any Action by One Firm to Change Price