question archive Which of the following characteristics differentiates a firm in an oligopolistic market from a firm in a perfectly competitive market? a
Which of the following characteristics differentiates a firm in an oligopolistic market from a firm in a perfectly competitive market? a
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Which of the following characteristics differentiates a firm in an oligopolistic market from a firm in a perfectly competitive market?
a. A firm in an oligopolistic market has to consider its own impact on price when making production decisions,
b. A firm in an oligopolistic market does not face competition from other firms,
c. Firms in oligopoly markets do not reach a profit maximum when marginal revenue equals marginal cost,
d. A firm in an oligopolistic market does not maximize profits.
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The correct option is b. A firm in an oligopolistic market does not face competition from other firms
Explanation: The characteristic which differs oligopoly from the perfect competition is the level of competition in these markets. Unlike perfect competition, oligopoly does not face any competition because the small number of sellers forms cartels and decides the prices of goods and services together. All the firms in an oligopoly are dependent on each other, which results in mo competition. On the other hand, is perfect competition, there are a large number of sellers competing with each because they are not dependent on each other.
