If one firm in a(n)_______________ cuts prices,this can take market share away from its competitors,forcing them to respond with similar price cuts in order to retain their market share.
A) monopoly
B) oligopoly
C) multipoint competition
D) cartel
E) price fixing agreement

Question

Quizplus · Accepted Answer

In an oligopoly market structure, a few large firms dominate the market, which leads to intense competition. If one firm in an oligopoly cut its price, it can effectively take market share away from its competitors. The competitors are then forced to respond with similar price cuts to retain their market share. This is because firms in an oligopoly are interdependent and closely monitor each other's actions, especially regarding pricing.

If One Firm in A(n)_______________ Cuts Prices,this Can Take Market