Q. 85.0( 1 Vote )
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The situation described here is of oligopoly form of the market.
Oligopoly is a market structure with a small number of firms while none of them can keep others from having significant influence.
Although only a few firms dominate, it is possible that many small firms may also operate in the market.
Example: there are many mobile phones producing company, and some even sell the products at the same price. So in order to increase its demands some offer lucrative offers.
In the Oligopoly market, there is a small number of big companies. So the policy of one company or strategy and offers of one company impacts other company. So we often see in the market that when one company reduces the price of their product their rival company also reduces the price.
This interdependence makes it difficult to draw a demand curve.
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