If one firm in an oligopoly cuts prices,then most likely,its competitors will
A)make profits.
B)also respond with similar price cuts.
C)correspondingly raise prices.
D)capture additional market share.
E)not be impacted by the price cuts.

Question

Quizplus · Accepted Answer

In an oligopoly, each firm has a significant market share and their actions affect the market. If one firm cuts prices, it creates an incentive for its competitors to also cut prices to remain competitive and maintain market share. Therefore, the most likely response of competitors in an oligopoly to a price cut by one firm is to also lower their prices.

If One Firm in an Oligopoly Cuts Prices,then Most Likely,its