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Homework answers / question archive / A basic characteristic of the firms is an oligopoly market structure is that they are: a) large (relative to the total market) and interdependent
A basic characteristic of the firms is an oligopoly market structure is that they are:
a) large (relative to the total market) and interdependent.
b) large (relative to the total market) and independent.
c) small (relative to the total market) and interdependent.
d) small (relative to the total market) and independent.
Ans: Large (relative to the total market) and interdependent.
Explanation:
A market is said to be oligopoly market if the market consists of few sellers of large size and the firms are interdependent. Since there are few sellers in the market, any decision regarding the price and quantity by one firm affects the decision of other firms. Therefore, firms are interdependent when deciding price and quantity.
Thus, option a is correct answer.
