Price Wars and Market Concentration
In an oligopolistic market, which of the following explains how an aggressive price war could result in a less competitive market structure over time?
A
The price war could cause smaller firms to exit the market, leading to increased concentration among remaining firms.
B
Long-term collaborative pricing strategies may emerge as firms seek stability after chaos.
C
Firms may adopt more efficient technologies to compete on price, increasing competition.
D
Price wars may encourage new entrants attracted by low prices and potential profits.
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