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In which market structure are only a few big sellers present, and each firm must consider the actions of rivals while deciding price and output?

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Question

In which market structure are only a few big sellers present, and each firm must consider the actions of rivals while deciding price and output?

Options

  • Perfect competition

  • Monopoly

  • Monopolistic competition

  • Oligopoly

MCQ
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Solution

Oligopoly

Explanation:

Oligopoly is characterised by a few large firms that are interdependent, so each firm’s price and output decisions depend on the behaviour of rival firms.

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