Explain the 'interdependence between firms' characteristic of oligopoly market. OR What difference does it make to the market when we say that firms are interdependent in oligopoly? Explain

Explain the 'interdependence between firms' characteristic of oligopol

1.	Explain the 'interdependence between firms' characteristic of oligopoly market. OR What difference does it make to the market when we say that firms are interdependent in oligopoly? Explain
Answer» <html><body><p></p>Solution :Firms under oligopoly are interdependent. Interdependence means that actions of one firm <a href="https://interviewquestions.tuteehub.com/tag/affect-851195" style="font-weight:bold;" target="_blank" title="Click to know more about AFFECT">AFFECT</a> the actions of other firms. A firm considers the action and <a href="https://interviewquestions.tuteehub.com/tag/reaction-22747" style="font-weight:bold;" target="_blank" title="Click to know more about REACTION">REACTION</a> of the <a href="https://interviewquestions.tuteehub.com/tag/rival-614395" style="font-weight:bold;" target="_blank" title="Click to know more about RIVAL">RIVAL</a> firms while determining its price and output <a href="https://interviewquestions.tuteehub.com/tag/levels-1072811" style="font-weight:bold;" target="_blank" title="Click to know more about LEVELS">LEVELS</a>. A <a href="https://interviewquestions.tuteehub.com/tag/change-913808" style="font-weight:bold;" target="_blank" title="Click to know more about CHANGE">CHANGE</a> in output or price by one firm evokes reaction from other firms operating in the market.</body></html>