Price and product quality competition tends to be vigorous when:

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When entry barriers are low, it is easier for new firms to enter the market, increasing the number of sellers and competition. This can lead to a focus on price and product quality to differentiate from competitors. Additionally, when potential entrants are few, existing firms may invest in quality and pricing strategies to maintain their market position. Conversely, when information on product quality is widely available, consumers may be more discerning and willing to pay for higher quality products, leading to increased competition around quality rather than price. When the number of active sellers is few, there may not be enough competition to drive prices down or increase product quality.

Price and Product Quality Competition Tends to Be Vigorous When