In which of the following situations would the level of competition be most intense?
A)Price is higher.
B)Product characteristics vary less across producers.
C)Demand is growing faster.
D)More firms are in the market.

Question

Quizplus · Accepted Answer

When more firms are in the market, there is likely to be more competition as each firm tries to gain market share and differentiate themselves from their competitors. This can lead to lower prices, improved product characteristics, and increased advertising and promotion activity in order to win over customers. Therefore, the level of competition is most intense when there are more firms in the market.

In Which of the Following Situations Would the Level of Competition