The correct answer is: (d) Existence of large number of firms. Explanation: Oligopoly is defined by a few dominant firms, not a large number. So let’s break it down: (a) Interdependence – YES, firms watch and react to each other. (b) Price rigidity – YES, prices tend to remain stable due to fear of price wars. (c) Group behaviour – YES, decisions are influenced by mutual actions. (d) Existence of large number of firms – NOPE! That’s a feature of perfect competition, not oligopoly.

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Asked by Rachana12 May 2025797 views

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Harshita · 12 May 2025
The correct answer is: (d) Existence of large number of firms. Explanation: Oligopoly is defined by a few dominant firms, not a large number. So let’s break it down: (a) Interdependence – YES, firms watch and react to each other. (b) Price rigidity – YES, prices tend to remain stable due to fear of price wars. (c) Group behaviour – YES, decisions are influenced by mutual actions. (d) Existence of large number of firms – NOPE! That’s a feature of perfect competition, not oligopoly.

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