Answer:
Firms are said to be interdependent in an oligopoly market because the firms under such a market structure experience a high degree of mutual interdependence. It is because the price and the output decisions of the firms are interdependent on each other. The price and output policy of a firm affect the policies and profit of another firm. This is because when one firm lowers (or rises) its prices, the rival firms may or may not follow suit. This makes the demand curve under the oligopoly market structure indeterminate, thereby making the firms mutually interdependent in an oligopoly market.
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