Why is interdependence the key characteristic of oligopoly?

Solutions

Expert Solution

Explanation :::

Oligopoly is such a system in which the sellers are few,This means there are two or more sellers but not innumerable,number of sellers are between two to ten.It is a market in which there are few sellers or producers who produce substitute goods.

In perfect competition there is large number of firms producing homogeneous goods,there is no firm that produce close sustitute ,so there is no question of interdependence,

In monopolistic competition also there are many firms selling near substitute products. here in this market also interdendence does not exist.

But in oligopoly There is small number of firms produciing close sustitute gods,and each firm has a sizable share of supply.If a firm changes quota or production rival firms get affected,Therefore rival firms also have to take certain actions,this actions affect the firm ,They are conscious about it,That's the reason interdependence is the key Characteristic of oligopoly

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

a) What is meant by mutual interdependence in oligopoly markets? Explain why oligopoly firms are unlikely...

a) What is meant by mutual interdependence in oligopoly markets? Explain why oligopoly firms are unlikely to engage in price competition. b) Discuss one advantage and one disadvantage of a monopolistic market structure compared to a perfectly competitive market structure.

Why is mutual interdependence important under Oligopoly but not so important under Perfect Competition, Monopoly or...

Why is mutual interdependence important under Oligopoly but not so important under Perfect Competition, Monopoly or Monopolistic Competiton? How would Game Theory feature in your response?

Which of the following is a characteristic of oligopoly but NOT perfect competition? a. Engages in...

Which of the following is a characteristic of oligopoly but NOT perfect competition? a. Engages in advertising and sales promotion b. Profit maximization according to the MR=MC rule c. Firms are prtakers rather than price makers d. Horizontal demand curve and marginal revenue curve The Tragedy of the Commons occurs because a. everyone deserves an equal share on government property. b. social and private costs and benefits differ. c. government property is most heavily used by the wealthy. d. established...

What are the key characteristics of an oligopoly model?

Please explain the characteristic of monopoly, monopolistic, oligopoly, and perfect competition

A key characteristic of useful financial information is understandability. How does this qualitative characteristic relate to...

A key characteristic of useful financial information is understandability. How does this qualitative characteristic relate to the background of the user of the information?

Risk is a key characteristic to understanding interest rates. Interest rates are key to the loanable...

Risk is a key characteristic to understanding interest rates. Interest rates are key to the loanable funds market. The goal of this exercise is to better understand how risk directly factors into interest rates. Let's try this example. Pretend you are a bank that has no costs whatsoever. Further, you’re a non-profit bank whose only goal is to break even. Explain what you need to set as your interest rate in the following situations in order to break even. You...

provide 5 examples of an oligopoly. please explain why each example is an oligopoly.

The development and play of muscles in locomotion is a key characteristic of the animal clade....

The development and play of muscles in locomotion is a key characteristic of the animal clade. First, defend this statement by reviewing the importance of muscle-driven locomotion among bilaterians keeping in mind their size and the limitations of protist locomotion-mechanisms . In your second paragraph, discuss key differences between the use of muscles for locomotion in worms with a hydrostatic skeleton and animals with hard internal or external skeletons . In your last paragraph, consider the pros and cons of...

Explain key characteristic of a liberal economic system? What are the distinguishing features of such a...

Explain key characteristic of a liberal economic system? What are the distinguishing features of such a system and how it differs from mercantilism and economic nationalism?

Subjects