Price wars are
A) most likely when there is a monopoly.
B) most likely when there is perfect competition.
C) equally likely in the cases of monopoly, oligopoly and perfect competition.
D) most likely when there is oligopoly.

Question

Quizplus · Accepted Answer

Price wars are most likely in oligopolistic markets because firms are highly interdependent and react to each other's pricing and marketing strategies. In monopolies, there is no competition to initiate a price war, while perfect competition features many firms with no single one able to significantly influence market prices to initiate a price war.

Price Wars Are