Correct Response: C. An Oligopoly is a market in which a few firms have a large majority of the market. The automobile industry is considered an oligopoly because just a few large firms dominate the market and produce similar products with differentiated features. The cost of owning an automobile (A) does not necessarily create an oligopoly structure. The fact that the U.S. automobile industry contributes a large amount to the gross domestic product (B) is not related to the oligopoly structure of the industry. Automobiles that are sold directly from a manufacturer to independent dealers (D) is a form of marketing distribution; this is unrelated to the nature of an oligopoly.
