Question

State with reason whether you agree or disagree with the following statement:

Interdependence is one of the important features of oligopoly.

Options

• Agree

• Disagree

Answer 1

I agree with the above statement.

Reasons:

1. There are few enterprises or sellers selling homogeneous or differentiated products in an oligopoly market.
2. In an oligopoly market, every seller must be watchful of any action done by competing enterprises.
3. If one company lowers its prices, all other companies in the industry try to do the same in order to compete. On the contrary, if one firm raises its prices, others may not follow.

Thus, interdependence is a fundamental characteristic of oligopoly.