Final answer:
When the top four firms of an industry hold between 60 percent and 80 percent of the market share, the market structure is known as an oligopoly. The correct option is B.
Step-by-step explanation:
If the top four firms of an industry account for more than 60 percent to 80 percent of the market, the situation is typically characterized as an oligopoly. This type of market structure is defined by a small number of firms dominating the market. High barriers to entry prevent new competitors from easily entering the market, and the dominant firms have significant control over pricing and output decisions. Examples of oligopolies include the commercial aircraft industry, with firms such as Boeing and Airbus, and the U.S. soft drink industry, dominated by Coca-Cola and Pepsi.
In an oligopolistic market, firms must make strategic decisions based on the actions of other dominant firms in the market. They face the choice of collaborating to set prices and control the market like a monopoly, or competing against each other, which can involve expanding output and cutting prices. Oligopolies often involve differentiated products and can showcase traits of both monopoly and perfect competition, although they are distinct from both monopolistic competition (many firms selling similar but not identical products) and pure competition (many firms selling identical products).