Conquer the CLTD Challenge 2026 – Navigate Your Path to Logistics Success!

A key characteristic of an oligopoly in the transportation sector is the collaboration among sellers to set prices. In an oligopoly, a small number of firms dominate the market. This structure often leads to interdependencies among the firms, where the decisions of one firm can significantly impact the others. To maintain profitability and market stability, companies may engage in practices such as price-setting agreements or collusion, explicitly or implicitly, to minimize competition and avoid price wars.

This behavior allows firms to exert greater control over market prices than they would in more competitive environments. In the transportation sector, where significant fixed costs and capacity constraints exist, such collaboration helps firms manage supply and avoid disrupting market equilibrium.

While collaboration is a significant factor, other options reflect different market dynamics. For instance, having many competitors with price control typically aligns more with a competitive market rather than an oligopoly. Price competition dominated by just two sellers narrows the focus too much, as oligopolies often involve multiple players. The reference to vertical integration, while relevant in some business contexts, does not define the primary characteristic of an oligopoly compared to the collaborative pricing aspect.