Final answer:
An oligopoly is a market structure with a few large firms that may or may not differentiate their products. Oligopolies are characterized by mutual interdependence among firms.
Step-by-step explanation:
Oligopolies exist in a market that has a small number of producers. These producers may or may not exhibit product differentiation. Examples of oligopolies include the auto industry, cable television, and commercial air travel. Oligopolies are characterized by mutual interdependence among firms, where decisions such as output, price, and advertising depend on the decisions of other firms. While product differentiation is not required for an oligopoly to form, it can help a firm gain market power and resist competition more easily.