Question

One major difference between oligopoly and perfect competition is that A. oligopolistic firms act interdependently while competitive firms operate independently. B. oligopolistic firms act independently while competitive firms operate interdependently. C. There is no major difference in the two types of firms since they both act interdependently. D. There is no major difference in the two types of firms since they both act independently.

Answer 1

B. oligopolistic firms act independently while competitive firms operate interdependently.

Step-by-step explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services produced in an economy within a given period which is usually a year. Market prices are set by the forces of demand and supply.

An oligopoly is characterised by few large firms. Firms in an oligopoly usually come together collusively to either set the prices or the quantity to be supplied in order to earn higher profits.

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