If a firm in an oligopoly expands its market share at prevailing prices,its competitors
A)Lose market share.
B)Increase their market share.
C)Ignore the expansion.
D)Increase their profits.

Question

Quizplus · Accepted Answer

In an oligopoly, there are few firms that dominate the market. If one firm expands its market share, it is likely that its competitors will lose market share as a result. This is because the market share of the dominant firms is often interdependent - one firm's gain is another firm's loss. Therefore, the best choice is A - Lose market share.

If a Firm in an Oligopoly Expands Its Market Share