Figure 13-3

-Oligopolist A cuts price in an attempt to enlarge his share of the market.His competitors retaliate with identical price cuts.In this case, in Figure 13-3, oligopolist A will move from point A to which point?
A)B
B)C
C)D

Question

Figure 13-3
​ 
-Oligopolist A cuts price in an attempt to enlarge his share of the market.His competitors retaliate with identical price cuts.In this case, in Figure 13-3, oligopolist A will move from point A to which point?
A)B 
B)C 
C)D

Quizplus · Accepted Answer

When oligopolist A cuts prices to increase market share and competitors retaliate with identical price cuts, the overall market price decreases but individual shares remain relatively unchanged. This scenario typically leads to a decrease in profits for all, represented by a move from a higher profit point to a lower one, such as moving to point C, indicating reduced profitability due to the price war.

Figure 13-3 ​

Figure 13-3