It is harder to explain the behavior of firms in oligopoly than in other market structures because in oligopoly
A)the firms act independently of each other
B)firms base their decisions on what their rivals do
C)only differentiated products are produced
D)only homogeneous products are produced
E)the demand curve can slope upward

Question

Quizplus · Accepted Answer

In oligopoly, firms base their decisions on what their rivals do, which makes it difficult to predict their behavior. Unlike in other market structures, where firms act independently or follow a set of standard rules, oligopoly firms strategically interact with each other to gain a competitive advantage. This results in a complex range of potential outcomes, making it harder to explain their behavior.

It Is Harder to Explain the Behavior of Firms in Oligopoly