McDonnell Douglas, a manufacturer of large commercial aircraft, raises its prices of aircraft by 10 percent. Boeing, another manufacturer of large commercial aircraft, raises its prices by 9 percent. Airbus, a third manufacturer of large commercial aircraft, follows with an increase of 9.5 percent. Each of these companies is practicing a type of pricing strategy characteristic of

Question

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Oligopoly is a market structure where a small number of firms dominate the market. The pricing behavior of these firms is interdependent, meaning that the actions of one firm affect the pricing decisions of the others. In this case, the three manufacturers of large commercial aircraft, McDonnell Douglas, Boeing, and Airbus, are engaged in price competition, which is a characteristic behavior of firms in an oligopoly market. Therefore, the best choice is C) an oligopoly.

McDonnell Douglas, a Manufacturer of Large Commercial Aircraft, Raises Its