Which of the following characterizes an oligopoly?

A) A single company dominates the market and has dominant pricing power.

B) The market is flooded with companies that sell essentially the same commodity-like product.

C) Companies dominate the market and the actions of one firm affect all other firms.

D) Changes in competitors' strategies or tactics do not influence a company.

E) Products offered by competitors are all identical substitutes.

• The correct answer is C) Companies dominate the market and the actions of one firm affect all other firms.

An oligopoly is a market characterized by a small number of firms that have almost all the control of a market. Generally, there are 2 to 10 firms that dominate the market. Additionally, the firms that are present in this market structure are interdependent. That is to say, the strategies implemented by one firm will affect all other firms in the market. Thus, option C) is correct.

Note that option A) is wrong because that is the description of a monopoly. Options B) and E) are incorrect because those are the characteristics of a perfectly competitive market. Option D) is incorrect because, in an oligopolistic market, the actions of one firm impact the whole industry.