In an oligopolistic market,price cutting is likely to increase total industry revenues.

Question

Quizplus · Accepted Answer

In an oligopolistic market, where there are only a few large firms dominating the industry, price cutting is not likely to increase total industry revenues. This is because the other firms in the market are likely to respond by cutting their prices as well, leading to a price war that ultimately reduces industry revenues. Therefore, in such a market, firms often rely on non-price competition, such as advertising, product differentiation, and innovation, to compete with each other and increase their market share.

In an Oligopolistic Market,price Cutting Is Likely to Increase Total