Refer to Table 25.2. Assume there are only four firms in the pool sweeper industry. If Clean Sweep manages to increase its sales to $3,000 per week at the current price and the size of the market does not change, the combined weekly sales of the three other firms will
A) Fall by $3,000 per week.
B) Also rise.
C) Not change.
D) Fall by less than $3,000 per week.

Question

Refer to Table 25.2. Assume there are only four firms in the pool sweeper industry. If Clean Sweep manages to increase its sales to $3,000 per week at the current price and the size of the market does not change, the combined weekly sales of the three other firms will
A) Fall by $3,000 per week. 
B) Also rise. 
C) Not change. 
D) Fall by less than $3,000 per week.

Quizplus · Accepted Answer

According to Table 25.2, Clean Sweep currently has a 50% market share and sells $2,000 per week. If they increase their sales to $3,000 per week, their market share would increase, and the other firms would lose market share. The combined weekly sales of the three other firms would fall by more than $3,000 since they would be losing market share to Clean Sweep. Therefore, the best choice is A, which says that the combined weekly sales of the three other firms will fall by $3,000 per week.