The fact that the behavior of one firm depends on the behavior of other firms is what differentiates oligopoly markets from the other three market structure types (perfect competition, monopoly, and monopolistic competition).

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In an oligopoly, a few firms dominate the market, and each firm's decisions (such as pricing, output, and advertising) are interdependent on the actions of the other firms, distinguishing it from perfect competition (where firms are price takers), monopoly (one firm dominates), and monopolistic competition (many firms, differentiated products, no significant interdependence).

The Fact That the Behavior of One Firm Depends on the Behavior