Which statement is true? (LO1) a) All oligopolies have only a few firms. b) Most oligopolies have only a few firms. c) Some oligopolies have only a few firms.

Oligopoly is a market structure characterized by a small number of large firms that dominate the market. These firms hold a significant market share, and their actions can significantly influence the market price and output levels.

We will evaluate the truth of each statement in terms of the characteristics of an oligopoly. a) All oligopolies have only a few firms. While it is true that oligopolies have a small number of large firms dominating the market, it is important to note that the term "few" would not necessarily apply to all oligopolies. The number of dominating firms can vary depending on the industry. b) Most oligopolies have only a few firms. This statement accurately describes an oligopoly since most oligopolies do have a small number of large firms controlling the market. Their decisions and competitive behavior can significantly influence the market environment. c) Some oligopolies have only a few firms. While this statement is also based on the characteristics of an oligopoly, it is not as accurate as statement (b) because it implies that not every oligopoly has a small number of dominant firms, which contradicts the definition of an oligopoly.

After analyzing each statement, we can conclude that statement (b) - "Most oligopolies have only a few firms" is the most accurate description of an oligopoly, as it acknowledges the core feature of an oligopoly being the presence of a small number of dominating firms.