Why are oligopolies strategically interdependent?

• A. Because there are many small competitors and no single firm's actions affect the market price.
• B. Because government agencies centrally plan outputs and force firms to coordinate strategies.
• C. Because firms always produce identical products so they cannot compete on features, which creates interdependence.
• D. Because each firm's optimal decision depends on how its rivals will react, so firms must anticipate competitors' responses when setting price or output.

Answer: (D)