Question

In an oligopolistic industry, mutual interdependence results from

Select one:

a. the product differentiation efforts of sellers.

b. the fact that a few firms produce most of the industry output.

c. the high degree of specialization that exists among the firms in the U.S. economy.

d. the fact that oligopolists have unlimited pricing discretion.

e. the strength of foreign competition.

Answer 1

As we all know that oligopoly industry is a type where -

there are few large sellers and large number of buyers .

in the market .

There are a Barriers to entry and exit in the market .

They form cartels to have price in market control .

They are mutually interdependent on each other because if set price very high then whole market will affect badly and the main reason for this is because there are few firms which decides most of the industry output .

The product is not very differentiated with each other and they do not have any foreign competitions for mutual interdependency.

Oligopoly exist in any type of economy and does not Limited only to US economy .

The few firms are interdependent on each other and form cartels.

The best example of this type of market is oil and petroleum exporting countries(OPEC),which controls the maximum share of the crude oil in the whole world .

They are metal interdependent for the pric decision.

Hence option B is true