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The market structure in which the number of sellers is small and there is interdependence in decision making by the firms is known as
- a)Oligopoly
- b)Monopolistic competition
- c)Monopoly
- d)Perfect competition
Correct answer is option 'A'. Can you explain this answer?
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The market structure in which the number of sellers is small and there...
Explanation:
Oligopoly:
- Oligopoly is a market structure in which a small number of firms dominate the market.
- The number of sellers is small in an oligopoly, leading to intense competition among them.
- In an oligopoly, firms often have to consider the reactions of their competitors when making decisions about pricing, marketing strategies, and product development.
- Firms in an oligopoly are interdependent, meaning that the actions of one firm can have a significant impact on the others.
- This interdependence leads to strategic interactions among firms, such as price wars, collusion, and non-price competition.
Comparison with Other Market Structures:
- Monopolistic competition is a market structure with many sellers offering differentiated products. In monopolistic competition, firms have some degree of market power but do not face the same level of interdependence as in an oligopoly.
- Monopoly is a market structure in which a single firm dominates the market and has significant market power. In a monopoly, there is no competition from other firms.
- Perfect competition is a market structure with many sellers offering identical products. In perfect competition, firms are price takers and do not have any market power.
Conclusion:
- In conclusion, oligopoly is characterized by a small number of sellers and interdependence in decision making. Firms in an oligopoly must consider the actions of their competitors when making strategic decisions, leading to complex and dynamic market interactions.
Oligopoly:
- Oligopoly is a market structure in which a small number of firms dominate the market.
- The number of sellers is small in an oligopoly, leading to intense competition among them.
- In an oligopoly, firms often have to consider the reactions of their competitors when making decisions about pricing, marketing strategies, and product development.
- Firms in an oligopoly are interdependent, meaning that the actions of one firm can have a significant impact on the others.
- This interdependence leads to strategic interactions among firms, such as price wars, collusion, and non-price competition.
Comparison with Other Market Structures:
- Monopolistic competition is a market structure with many sellers offering differentiated products. In monopolistic competition, firms have some degree of market power but do not face the same level of interdependence as in an oligopoly.
- Monopoly is a market structure in which a single firm dominates the market and has significant market power. In a monopoly, there is no competition from other firms.
- Perfect competition is a market structure with many sellers offering identical products. In perfect competition, firms are price takers and do not have any market power.
Conclusion:
- In conclusion, oligopoly is characterized by a small number of sellers and interdependence in decision making. Firms in an oligopoly must consider the actions of their competitors when making strategic decisions, leading to complex and dynamic market interactions.
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The market structure in which the number of sellers is small and there is interdependence in decision making by the firms is known asa)Oligopolyb)Monopolistic competitionc)Monopolyd)Perfect competitionCorrect answer is option 'A'. Can you explain this answer?
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