Which of the following is a characteristic of an oligopoly market structure? Man
ID: 1155260 • Letter: W
Question
Which of the following is a characteristic of an oligopoly market structure?
Many firms.
Price equals marginal revenue.
Mutual interdependence.
A unique product.
Which of the following is a characteristic shared by both oligopoly and monopoly?
Mutual interdependence.
Significant barriers entry into the market.
Few dominant firms in the industry.
Normal profits in the long run.
the stability of a cartel is enhanced if:
Many members.
Members can differentiate products.
Members have similar cost structures.
Weak barriers to entry.
Explanation / Answer
Which of the following is a characteristic of an oligopoly market structure?
Mutual interdependence
Under oligopoly, there are only a few firms, each producing a harmonized or slightly differentiated product. Since the number of firms is small, each firm enjoys a large share of the market and has a significant control on the price and output decisions. Thus, there is interdependence of firms.
Which of the following is a characteristic shared by both oligopoly and monopoly?
Significant barriers entry into the market
In both monopoly and oligopoly there will be a strong barrier to enter into the market. It will be very significant in case of monopoly.
The stability of a cartel is enhanced if:
Members have similar cost structures.
In a cartel the participating members have similar cost structures
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