A company decides to advertise their product, another company in the same industry tends to advertise too.

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A company decides to advertise their product, another company in the same industry tends to advertise too. This is particularly true with the wireless service industry. For example: when AT&T decides to advertise, Verizon will likely advertise too. Based on this context, answer the following questions:

Discuss what market structure these companies belong to. Make sure to explain the characteristics of the market structure.
Describe some of the barriers to entry faced by wireless companies.
Explain how companies in this market structure maximize their profit.
Discuss why AT&T would spend their money advertising when they know that Verizon will always counter it with their own advertisement.

Posted Date: May 06, 2024 03:05 AM

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A company decides to advertise their product, another company in the same industry tends to advertise too.

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Expert Answer:

ANSWER Market Structure These companies belong to an oligopoly market structure In an oligopoly the market is dominated by a few large firms that have significant market power The key characteristics ... View the full answer

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