QFresh,a brand for energy drinks launched a healthy lime based drink without preservatives.Immediately after this another brand,Fast Fizz,which manufactures energy drinks,also announced the launch of a new refreshing drink without preservatives.Then Ignite,a third brand of energy drinks,reduced the price of its apple based drink.Which of the following is most likely to happen in this oligopolistic market set up?
A) QFresh and Fast Fizz will reduce the prices of their respective drinks.
B) Fast Fizz will launch another new drink.
C) QFresh will tie up with Ignite to launch a completely new product.
D) Fast Fizz and Ignite will collaborate against QFresh.
E) QFresh will have an increased domestic consumption.

Question

Quizplus · Accepted Answer

In an oligopolistic market, where there are few dominant players, a change in strategy or pricing by one brand can trigger similar reactions from competitors. In this scenario, QFresh and Fast Fizz have both launched a preservative-free drink, so they are likely to engage in price competition to capture market share. Therefore, it is most likely that QFresh and Fast Fizz will reduce the prices of their respective drinks to attract more customers. There is no indication that Ignite will collaborate with QFresh, or that Fast Fizz will launch another new drink, or that the domestic consumption of QFresh will increase significantly.

QFresh,a Brand for Energy Drinks Launched a Healthy Lime Based