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"In a hypothetical market of mobile phones, the brand AWAAZ was leading the market share. Its nearest competitor VAARTA suddenly changed its strategy by bringing in a new model of the mobile phone at a relatively lesser price. in response, AWAAZ too slashed its price." Based on the above information, identify the form of market represented and discuss any one featureof the market.

Answer» <html><body><p></p>Solution :The form of market represented in the question is <a href="https://interviewquestions.tuteehub.com/tag/oligopoly-585440" style="font-weight:bold;" target="_blank" title="Click to know more about OLIGOPOLY">OLIGOPOLY</a>. Under oligopoly, firms are in a position to <a href="https://interviewquestions.tuteehub.com/tag/influence-1043703" style="font-weight:bold;" target="_blank" title="Click to know more about INFLUENCE">INFLUENCE</a> the prices. However, they try to avoid price competition for the fear of price war. They follow the policy of price rigidity. Price rigidity refers to a situation in which price tends to stay fixed irrespective of changes in demand and supply conditions. Firms use <a href="https://interviewquestions.tuteehub.com/tag/methods-11862" style="font-weight:bold;" target="_blank" title="Click to know more about METHODS">METHODS</a> like advertising, better services to customers,etc to compete with each other.If a firm tries to reduce the price, the rivals will also react by reducing their prices. However, if it tries to raise the price, other firms might not do so. It will lead to loss of customers for the firm, which intended to raise the price. So, firms prefer non-price competition <a href="https://interviewquestions.tuteehub.com/tag/instead-516622" style="font-weight:bold;" target="_blank" title="Click to know more about INSTEAD">INSTEAD</a> of price competition.</body></html>


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