Price and non-price competition

How do firms engage in selective price wars in some oligopolies?

• Competing on all goods equally
• Competing only on low-profile goods
• Colluding to set prices
• Avoiding price competition altogether

What is the objective of predatory pricing in the airline industry?

• Increase overall industry profits
• Encourage new entrants
• Drive established firms out of the market
• Stabilize prices in the long run

In limit pricing, what is the purpose of setting a low price?

• Maximize profits in the short run
• Encourage new entrants
• Discourage new entrants
• Achieve perfect competition

In a perfectly competitive market, what is the primary determinant of competition between firms?

• Product quality
• Marketing mix
• Price
• Barriers to entry

What role does advertising and sales promotion play in non-price competition?

• Setting high prices
• Informing customers and creating positive perceptions
• Encouraging price wars
• Colluding with other firms

What is the key element of placement in the marketing mix?

• Product differentiation
• Distribution
• Price setting
• Collusion with competitors

Why do branded products often sell for higher prices than unbranded products?

• Lower production costs
• Unique characteristics
• Asymmetric information
• Lack of consumer attention

What is the primary focus of successful branding in non-price competition?

• Lowering prices
• Creating similarities with other products
• Unique characteristics
• Encouraging price wars

How does a lack of product differentiation impact price wars in oligopolistic markets?

• Intensifies price wars
• Encourages collusion
• Stabilises prices

• Eliminates competition

What may drive prices to rise again in the long run after a price war in oligopolistic markets?

• Increase in demand
• Decrease in supply
• Exit of firms from the market
• Strong branding strategies