In oligopoly situations:
A) prices tend to be rigid and similar--because of price-fixing agreements.
B) price wars may occur if a firm seeks to increase its market share by cutting price.
C) a firm faces an INELASTIC demand curve if it raises price.
D) the quantity offered changes a lot due to the lack of a fixed market price.
E) All of these alternatives are correct.

Question

Quizplus · Accepted Answer

In oligopoly situations price wars may occur if a firm seeks to increase its market share by cutting price. If the firm lowers its price, it must expect competitors to follow.

In Oligopoly Situations