CA Foundation P4 · Chapter 4 · Question 13 of 15
The most distinctive feature of an oligopoly is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Interdependence of decision-making among a few large firms
Explanation
With only a few sellers, each firm's price and output decisions affect its rivals, who are likely to react. This mutual interdependence makes oligopoly behaviour complex. Many small sellers characterise perfect or monopolistic competition, and a single seller is a monopoly.
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