Which of the following best describes an oligopoly market structure?

• A. A market with many small firms, none of which can influence the market price.
• B. A market with a single seller that controls the entire supply of a product.
• C. A market where products are identical and firms are price takers.
• D. A market dominated by a few large firms, each of which has significant control over price.

Answer: (D)

Verified step by step guidance

1. Understand the definition of different market structures: perfect competition, monopoly, and oligopoly.
2. Recall that in perfect competition, there are many small firms, and none can influence the market price; firms are price takers.
3. Recognize that a monopoly is a market with a single seller controlling the entire supply and price.
4. Identify that an oligopoly is characterized by a few large firms dominating the market, each having significant control over the price.
5. Match the given options to these definitions to determine that the correct description of an oligopoly is 'A market dominated by a few large firms, each of which has significant control over price.'