Which of the following best describes an oligopoly market structure?

• A. A market dominated by a few large firms, each of which has significant market power.
• B. A market where firms have no control over price and must accept the market price.
• C. A market with a single seller and many buyers.
• D. A market with many small firms selling identical products.

Answer: (A)

Verified step by step guidance

1. Understand the key characteristics of different market structures: perfect competition, monopoly, oligopoly, and monopolistic competition.
2. Recall that in a perfect competition market, there are many small firms selling identical products, and firms are price takers with no control over the market price.
3. Recognize that a monopoly market consists of a single seller who has significant control over the price because there are no close substitutes.
4. Identify that an oligopoly is characterized by a few large firms dominating the market, each having significant market power to influence prices and output decisions.
5. Match the description 'a market dominated by a few large firms, each of which has significant market power' to the oligopoly market structure.