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Charcos Oil Is an Oil Marketing Company

Question 112

Multiple Choice

Charcos Oil is an oil marketing company.The company has only three competitors in the country where it operates and has formed an agreement with the competitors to fix the prices of their offerings.This move was essential because of the price sensitivity of the oil market. Which of the following is likely to occur if Charcos Oil reduces its prices?


A) The company's profitability will increase.
B) Competitors will also follow the price cut.
C) The market will become a monopoly.
D) Some of the competitors will stop business.

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