In 2005,General Motors introduced a blockbuster promotion by offering customers the employee discount prices for any vehicle.Chrysler and Ford followed the trend and offered the same program.This intense price competition among the three major automobile producers resulted in lower profits for all three companies.This outcome illustrates a problem for firms in what type of economic structure?
A)monopolistic competition
B)oligopolistic markets
C)pure monopoly
D)pure competition

Question

Quizplus · Accepted Answer

The intense price competition among the three major automobile producers, resulting in lower profits for all three companies, indicates an oligopolistic market where a few dominant firms compete with each other. In such a market structure, firms tend to watch each other's moves and react accordingly, leading to price wars and reduced profits.

In 2005,General Motors Introduced a Blockbuster Promotion by Offering Customers