Asked by hannah pyron on May 28, 2024

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In oligopoly,a firm must realize that:

A) what it does has no effect on the other firms in the industry.
B) its behavior will be ignored by other firms in the industry.
C) another major firm may dominate choices in the industry,and it will have to behave accordingly.
D) collusion was made legal in 2004.

Dominate Choices

refers to decisions or options that prevail over others in a given situation, often considered superior in achieving desired outcomes.

Major Firm

A significant company in its industry, often characterized by large revenue, extensive operations, and considerable market influence.

Oligopoly

An oligopoly is a market structure dominated by a small number of large firms, leading to limited competition, where the actions of one firm significantly impact the others.

  • Recognize the strategic interdependence of firms in an oligopoly.
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AK
Addison KelleyJun 01, 2024
Final Answer :
C
Explanation :
In oligopoly, there are usually a few dominant firms in the industry, and their behavior greatly impacts the market. In order to be successful, a firm must understand and adapt to the actions of these dominant firms. Choosing A or B is incorrect because a firm's behavior will definitely have an effect on others in the industry, and ignoring the behavior of other firms could lead to negative consequences. Choice D is incorrect because there are still laws against collusion, even in oligopoly markets.