Imperfect competition does not mean "no competition.Many firms have rivals but are still in an imperfect competition industry.A rival wants to do which of the following:
A)increase profits.
B)increase market share.
C)advertise to shift out their demand curve.
D)all of the above.
E)none of the above.

Question

Quizplus · Accepted Answer

A rival in an imperfect competition industry wants to do all of the three things - increase profits, increase market share, and advertise to shift out their demand curve. Imperfect competition means that firms have some degree of market power, and hence they can influence the market price and quantity. As such, firms want to maximize their profits, and one way to do that is by capturing a larger share of the market or by increasing the demand for their goods through advertising. Therefore, all of the choices are appropriate for a rival in an imperfect competition industry.

Imperfect Competition Does Not Mean "No Competition