If competitive market circumstances are such that there is some leader-follower price competition, some product differentiation, and the purpose of advertising is to inform, but avoid price competition, then we must be operating in a (n) :

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Business

Dexter Simpson

5 October, 19:25

If competitive market circumstances are such that there is some leader-follower price competition, some product differentiation, and the purpose of advertising is to inform, but avoid price competition, then we must be operating in a (n) :

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Brodie Fletcher · Answer 1

Oligipoly

Explanation:

Oligopoly market is characterised by:

1. Few large firms

2. Firms set their prices together which is known as a cartel or through price leadership where a firm sets the market price.

3. Firms engage in advertisement.

4. Firms avoid price competition.

An example of an oligopoly is OPEC. OPEC is a cartel.