In an oligopoly market structure, which of the following is a key characteristic that affects profit maximization?

In an oligopoly market structure, a key characteristic that affects profit maximization is the interdependence among firms. This means that the actions of one firm, such as changing prices or production levels, directly influence the decisions of other firms in the market. For example, if one company lowers its prices to attract more customers, other companies may feel pressured to lower their prices as well to remain competitive. Because firms are closely watching each other, they often engage in strategic behavior, which can lead to collusion or price wars. This interdependence makes it challenging for any single firm to maximize profits without considering the potential reactions of its competitors.