Which of the following best describes oligopoly?

The definition of oligopoly accurately encompasses the concept that a small number of firms hold significant market power and dominate the production or supply of a product or service. In an oligopolistic market structure, these firms are interdependent, meaning the actions of one firm can significantly impact the others. This leads to strategic behavior regarding pricing and output decisions, as each firm must consider the potential reactions of its competitors.

The other options describe different market structures. The scenario of many firms selling the same product aligns with perfect competition, while the concept of one firm controlling the entire market describes a monopoly. The idea that no firm has any control is representative of perfect competition as well, where individual firms are price takers and cannot influence the market price. Thus, the option that describes oligopoly as a market dominated by a few firms succinctly captures its essential characteristics.