It is difficult to draw a demand curve for a firm in an oligopoly because the firm:
A) does not know if its competitors' products are perfect substitutes for its product.
B) does not know if the demand for its product is elastic or inelastic.
C) does not know how its competitors will react when it changes its price.
D) none of the above

Question

Quizplus · Accepted Answer

In an oligopoly, firms are interdependent, meaning each firm's pricing and output decisions affect the others. This makes it difficult to predict competitors' reactions to price changes, complicating the drawing of a demand curve.

It Is Difficult to Draw a Demand Curve for a Firm