Which structure best describes an oligopoly?

The characteristic that defines an oligopoly is the presence of a few large sellers that dominate the market, which is accurately described by the selected option. In an oligopolistic market structure, these few firms have significant control over the market, and their pricing and output decisions can have a considerable effect on one another. Because there are only a handful of key players, firms are often interdependent, leading to strategic decision-making where the actions of one firm directly influence the others.

In contrast to this, the other options outline different market structures. A market dominated by a single seller is referred to as a monopoly and is distinctly different from oligopoly due to its singular control and lack of competition. A market with many sellers and no barriers to entry describes perfect competition, where numerous small competitors exist, and firms have no significant market power. Lastly, a market with differentiated products offered by many companies aligns more with monopolistic competition, which focuses on many firms offering unique products with some pricing power.

Thus, the definition of an oligopoly as a market with a few large sellers is key to understanding its unique competitive dynamics and how it varies from other forms of market structures.