Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Many firms competing for market share
B
A single firm dominates the market
C
A few firms control a large portion of the market
D
Perfect information available to all consumers
Understanding the Answer
Let's break down why this is correct
Answer
An oligopoly is a market structure where a small number of firms dominate the market. This means that only a few companies have a lot of control over the prices and supply of goods or services. One key characteristic of an oligopoly is that the decisions made by one firm can significantly impact the others, leading to strategic behavior among the companies. For example, if one car manufacturer lowers its prices, other manufacturers might follow suit to stay competitive. This interdependence creates a unique situation where firms must consider their rivals' actions when making business decisions.
Detailed Explanation
In an oligopoly, only a few companies control most of the market. Other options are incorrect because Some might think many companies mean competition; People may confuse an oligopoly with a monopoly, where one company is in charge.
Key Concepts
Oligopoly
Topic
Market Structures Overview
Difficulty
easy level question
Cognitive Level
understand
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