ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Under Oligopoly, since a few firms hold a significant share in the total output of the industry, each firm is affected by the price and output decisions of rival firms. Therefore, there is a lot of interdependence among firms in an oligopoly.

Detailed explanation-2: -Oligopolistic Market Characteristics: Firm Interdependence Firms in an oligopolistic market are interdependent. This means they consider what their competitors will do and factor it into their decisions.

Detailed explanation-3: -What are the characteristics of oligopoly in economics? Oligopoly characteristics include high barriers to new entry, price-setting ability, the interdependence of firms, maximized revenues, product differentiation, and non-price competition.

Detailed explanation-4: -In an oligopoly market, there is a small number of big firms. Accordingly, there is a high degree of mutual interdependence, implying that price and output policy of one firm has a significant impact on the price and output policy of the rival firms in the market.

Detailed explanation-5: -Collusive. The collusive price leadership model may emerge within markets that have oligopolistic conditions. Collusive price leadership occurs as a result of an explicit or implicit agreement among a handful of dominant firms to keep their prices in mutual alignment.