Profits are interdependent in oligopoly markets because

(a) products are differentiated.

(b) managers are trying to set prices cooperatively in order to maximize total industry profit.

(c) entry into the market is not restricted by some form of entry barrier.

(d) each firm in the market is relatively large.

(e) all of the above.

One of the key characteristics of an oligopoly is that there are high barriers to entry. If it is difficult for competitors to enter a market, this will allow firms to consolidate until only a few are left over. Thus, we can eliminate answer choices C and E. We know that firms are self-interested and want to maximize their individual profits so B does not make sense. Between answer choices A and D, D makes the most sense. Since there are only a few firms in an oligopoly market, those few firms will have large market shares.