All of the following statements are true about an oligopolistic competitive market situation except which?
A)The products can be differentiated or undifferentiated.
B)Advertising that uses comparative (head-to-head)messages is the norm.
C)The purpose of advertising is to inform.
D)Sellers try to avoid price competition,which can lead to price wars.
E)Firms in these markets stay aware of a competitor's price cuts or increases and may follow suit.

Question

All of the following statements are true about an oligopolistic competitive market situation except which?
A)The products can be differentiated or undifferentiated.
B)Advertising that uses comparative (head-to-head)messages is the norm.
C)The purpose of advertising is to inform.
D)Sellers try to avoid price competition,which can lead to price wars.
E)Firms in these markets stay aware of a competitor's price cuts or increases and may follow suit.

Quizplus · Accepted Answer

An oligopoly is a type of competition in which there are few sellers who are sensitive to each other's prices.The few sellers in an oligopolistic competitive market situation try to avoid price competition because it can lead to disastrous price wars in which all lose money.Yet firms in such industries stay aware of a competitor's price cuts or increases and may follow suit.The products can be undifferentiated or differentiated.Firms use informative advertising that avoids head-to-head price competition.

All of the Following Statements Are True About an Oligopolistic