In a dominant firm market,:
A)one firm possesses a large share of the market but competes against numerous small firms, each offering identical products.
B)one firm possesses a large share of the market but competes against a small number of other firms, each offering differentiated products.
C)a small number of firms possess a large share of the market but compete against numerous small firms, each offering a differentiated product.
D)a small number of firms possess a large share of the market but compete against numerous small firms, each offering an identical product.

Question

Quizplus · Accepted Answer

In a dominant firm market, one firm, known as the dominant firm, possesses a large share of the market and competes against numerous smaller firms. These smaller firms typically offer products that are identical or very similar to those offered by the dominant firm, making the dominant firm's pricing and output decisions influential in the market.

In a Dominant Firm Market