Which economic term describes a market condition where a small number of large firms dominate the market, making their decisions highly interdependent?

💡 Solution & Explanation

An oligopoly market structure is defined by a small number of interdependent firms where any change in output or pricing by one competitor immediately influences the strategic decisions of others. In contrast, monopolistic competition involves many firms selling differentiated products, while perfect competition features numerous price-taking firms. Microeconomic market structures are fundamental to economic theory exams.