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xxTIMURxx [149]
2 years ago
7

Which of the following is NOT a necessary condition for oligopoly? differentiated products barriers to entry strategic dependenc

e of firms either a small number of firms or market dominance by a small number of firms
Business
1 answer:
stepladder [879]2 years ago
8 0

Answer:

differentiated products.

Explanation:

An oligopoly occurs when a few large firms dominate a market and they aim to maximise profit. The action of one firm has significant effect on the market, so the firm's are interdependent.

There are high barriers to entry including use of government liscences, patents, economies of scale, and actions taken by firms to discourage entry into the market.

However differentiation of products is not a necessary condition for oligopoly. Products can be homogenous or differentiated.

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Explanation:

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If Mary is selling one product at a lower promotional price then the buyer will think the other products are being sold at a lower price too right?

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Answer:

This is an example of price leadership.

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So when a dominant firm changes its price, the followers have to follow it if we they want to retain their market share.

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