In which of the following market structures is there clear-cut mutual interdependence with respect to price-output policies? A) Pure monopoly , B) Monopolistic competition, C) Pure competition, D) Oligopoly

The market structure described above represents the

The oligopoly market has large firms; however, the number of firms is small. In an oligopoly market, every firm aims at increasing profits by extension of market share. This occurrence results in price wars among the firms. To increase revenue, a firm lowers its price, which results in increased sales and market extension. As a result, other firms will follow by lowering their product price too, to maintain their market share and profitability.