Question

In an industry that is dominated by a few large companies, incentives are

Answer 1

Answer:

An Oligopoly

Explanation:

An Oligopoly is a type of business in which a few number of large organisations have total control over the market. In this type of business, the price of each goods sold in the market depends mostly on the conduct of each companies this factor can prevent new competitors from entry into the market, this is done to protect the amount of profit generated by each firm.

There is a high rate of competition in the market as each companies are bringing up new ways to advertise their products. Therefore, if a particular firm reduces their price another firm will follow suit by futher reducing their products, this is why incentives is used in this type of business to attract customers. This can be done by giving discounts on the purchase of a product or giving out free samples of the product to customers. All these are carried out to increase sales.