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The single most important feature that distinguishes oligopoly from other market forms is:
AComplete freedom of entry with no barriers
BThe presence of a single seller with no rivals
CA perfectly homogeneous product in every case
DStrategic interdependence in firms' decision-making
Answer & Solution
Correct answer: D. Strategic interdependence in firms' decision-making
1. Oligopoly has only a few large firms, each big enough to affect the market.
2. Any price or output move by one firm forces rivals to react.
3. So each firm must anticipate rivals' responses before acting.
4. This mutual dependence, strategic interdependence, is the defining feature.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 4 Unit III "Price-Output Determination under Different Market Forms", p.25_
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