McqMate
| Q. |
Which of the following most closely approximates our definition of oligopoly? |
| A. | The cigarette industry |
| B. | The barber shops |
| C. | The gasoline stations |
| D. | Wheat farmers |
| Answer» A. The cigarette industry | |
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Explanation: An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Because there are few sellers, each oilgopolist is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by the decisions of other firms. Businesses that are part of an oligopoly share some common characteristics: they are less concentrated than in a monopoly, but more concentrated than in a competitive system. This creates a high amount of interdependence which encourages competition in non price-related areas, like advertising and packaging. |
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