Question

One key difference between an oligopoly market and a competitive market is that oligopolistic firms Group of answer choices are price takers while competitive firms are not. sell their product at a price equal to marginal cost while competitive firms do not. sell completely unrelated products while competitive firms do not. can affect the profit of other firms in the market by the choices they make while firms in competitive markets do not affect each other by the choices they make.

Answer 1

Answer: Can affect the profit of other firms in the market by the choices they make while firms in competitive markets do not affect each other by the choices they make

Explanation:

An Oligopolistic Market is one where Competitors are few and the Industry is therefore considered to be CONCENTRATED.

In such Markets, the firms are constantly faced with the decisions such as, whether to implement a new strategy, whether to collude with other firms and the like.

Because there are very few Firms involved, a deviation from policy could affect other firms as the Rational Consumer would respond to said policy which might reduce or increase the Market Share of other firms.

This is in contrast to Competitive markets where there are so many sellers so individual decisions do not really have an effect on the market.