Question

All oligopoly models share several assumptions. Which of the following is among them?

A. There are few or no barriers to entry.
B. Each of the firms is independent of the actions of the other firms.
C. There are only a few dominant firms in the industry.
D. The firms sell homogeneous products.

Answer 1

Answer: Option C

Step-by-step explanation: Oligopoly refers to a market structure where a few firms dominate the complete market. The level of investment in such industries is very high so it is not easy to enter or exit these industries.

Automobile is one of many examples of oligopoly structure. There are few big firms in the industry therefore the operations of one affects the operation of others.

Hence from the above we can conclude that the correct option is C.