Which economic term refers to a market dominated by a small number of large firms?

💡 Solution & Explanation

An oligopoly is defined as a market structure dominated by a small number of large firms where strategic interaction and interdependence heavily influence pricing and output decisions. Monopolistic competition features many firms selling differentiated products, monopsony describes a market with a single buyer, and perfect competition involves numerous small price-taking firms. Game theory is frequently applied by economists to analyze strategic pricing behavior under oligopoly.