The Textile Industry in a Foreign Country Is Controlled by Four

question 75

Multiple Choice

The textile industry in a foreign country is controlled by four major companies. Last week, one of the companies decided to cut prices as a way to expand inventory. Since this industry is an oligopoly, what will be the likely response of the other three companies?

• A) They will increase production levels.
• B) They will make similar price cuts.
• C) They will raise prices.
• D) They will seek additional market share.
• E) They will not respond to the price cuts.

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