competitive market circumstances are such that there are few sellers who are sensitive to each other's prices,and the purpose of advertising is to inform but avoid price competition,then __________ must exist in the industry.
A) a pure monopoly
B) monopolistic competition
C) pure competition
D) an oligopoly
E) oligopolistic competition

Question

Quizplus · Accepted Answer

If there are few sellers who are sensitive to each other's prices and advertising is used to avoid price competition, then the industry must be an oligopoly. In an oligopoly, there are a small number of large firms that dominate the market and are able to influence prices and other market conditions. Advertising may be used to differentiate the products of each firm or to create brand loyalty without directly competing on price.

Competitive Market Circumstances Are Such That There Are Few Sellers