Which of the Following Intensifies Price Competition

question 39

Multiple Choice

Which of the following intensifies price competition?

• A)Non-price-related costs of using competing alternatives are high.
• B)Wider distribution of competitor and or substitution offers.
• C)Personal relationships have been established.
• D)Switching costs are high.
• E)Customer need for time and location specificity.

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Definitions:

Monopolistically Competitive

An economic scenario where multiple companies offer products that are alike but not exactly the same, providing them with a certain level of influence over the market.

P < ATC

A situation where the price of a good is less than the average total cost of producing that good, indicating a potential loss to the firm.

Optimal Output

The level of production where marginal cost is equal to marginal revenue, maximizing profit or utility.

Herfindahl Index

A method for evaluating market concentration by squaring individual firms' market shares and then aggregating these squared figures.