Which of the following is not a characteristic of oligopoly? A

The correct answer is: A. P = MC

• A. P = MC. Oligopolistic firms behave like monopolistic firms. Thus, they do not set their price equal to the marginal cost (like perfectly competitive firms).
• B. Few firms. An oligopoly market has a few firms in the market. Thus, this is a characteristic of an oligopolistic market.
• C. Strong barriers to entry. Just like in a monopoly market, there are strong barriers to entry into an oligopolistic market.
• D. Price-maker. Oligopolistic firms have monopoly power and thus, they are price makers.
• E. P > MR. Since oligopolistic firms have some market power, they set their price above their marginal revenue.