One key difference between an oligopoly market and a competitive market is that oligopolistic firms
A)are price takers while competitive firms are not.
B)can affect the profit of other firms in the market by the choices they make while firms in competitive markets do not affect each other by the choices they make.
C)sell completely unrelated products while competitive firms do not.
D)sell their product at a price equal to marginal cost while competitive firms do not.

Question

Quizplus · Accepted Answer

In an oligopoly market, the choices made by one firm can affect the profit of other firms in the market due to interdependence. Firms in a competitive market, on the other hand, do not affect each other by the choices they make as they are price takers. Thus, option B is correct. Options A, C, and D are incorrect as they do not differentiate between oligopolistic and competitive markets accurately.

One Key Difference Between an Oligopoly Market and a Competitive