Question

why is competition limited in an oligopoly? high entry costs prevent new producers from entering the market. producers completely refuse to engage in price wars. no major distinctions exist between producers. producers actively segment the market to avoid competition.

Explanation:

In an oligopoly, high entry - costs like large capital requirements, economies of scale enjoyed by existing firms, and regulatory barriers prevent new producers from entering. This limits competition as the number of firms remains low. Producers don't completely refuse price - wars, there can be major distinctions between producers, and while market segmentation can be a strategy, high entry costs are the main reason for limited competition.

Answer:

High entry costs prevent new producers from entering the market.