Final answer:
In an oligopoly, competing firms are interdependent, with each firm's actions influencing the others. This market condition leads to either collaboration, resembling a monopoly, or competition, which can drive down prices and profits.
Step-by-step explanation:
A key feature of an oligopoly is that the competing firms in the industry are interdependent, meaning the actions of any one firm will influence the behaviors of the other firms. In oligopolistic markets, a small number of large firms dominate, and their decisions regarding output, price, and advertising are dependent on the decisions of the other firms within the same industry. Such markets are characterized by high barriers to entry and firms can collaborate to act like a monopoly or compete vigorously, leading to lower prices and profits.