Mutual interdependence means that each oligopolistic firm:
a. faces a perfectly elastic demand for its product.
b. must consider the reactions of its rivals when it determines its price policy.
c. produces a product identical to those of its rivals.
d. produces a product similar but not identical to the products of its rivals.
Mutual interdependence means that each oligopolistic firm must consider the reactions of its rivals when it determines its price policy.
An oligopoly has a limited amount of competition because there is a small amount of producers or sellers in the market. Because there is a small amount, they consider the reactions someone else may have if they change the the price policy. These firms can not keep each other from having a large influence over the market.
