In which market model is there mutual interdependence?
A) Monopolistic competition
B) Pure competition
C) Pure monopoly
D) Oligopoly

Question

Quizplus · Accepted Answer

In an oligopoly, there are few firms in the market, so each firm's actions have a significant impact on the other firms. Therefore, there is mutual interdependence between the firms. In monopolistic competition, firms can differentiate their products, so they are not completely dependent on each other. In pure competition, there are many small firms, so each firm's actions do not have a significant impact on the others. In pure monopoly, there is only one firm, so there is no mutual interdependence with other firms.

In Which Market Model Is There Mutual Interdependence