Question

Henry ventures into a new business with few competitors and requires a huge investment. Soon after entering the business, one of Henry's competitors introduces a price cut that forces Henry to reduce the prices of his products as well. In this scenario, Henry has ventured into _____.

Answer 1

Answer:

Oligopoly

Explanation:

An oligopoly is a market structure which is caracterized by having few competitors and each one has market power to change the equilibrium price or quantity. According to this, Henry´s competitor had the market power to reduce the price of his products. Also, it might be some barries to entry (to the market) and that is why the problem states that Henry had to do a huge investment (not everyone can do it).