A price war is a typical sign of which of the following? public good, perfect competition, monopoly, and oligo

Question

A price war is a typical sign of which of the following? public good, perfect competition, monopoly, and oligo

Answer 1

an oligarchy.

It is not a public good, perfect competition theoretically gives stable prices, monopolies have nobody to war over prices with.

Answer 2

A price war is a typical sign of Oligopoly: often rivals of more or less equal size sek to increase their market share by price cutting/ price wars even if such price cutting hurts the profit interest of each of the two or more such rivals.

In the case of public good, there is no price war possible because these goods are not supplied by competing firms trying to increase market share at the cost of others. In perfect competition, the firms are price takers and cannot influence prices: if they try to price their products below the equilibrium market price they will lose and reach shut down point or they will not any buyers willing to purchase their products. Monopoly is a single supplier/ producer firm and it cannot enter price war with a non=existent rival/ competitor.