.Why don’t they simply try and gain market share by cutting price?

ECN360 The manufacturers of R.C. Cola, with 2.1% market

ECN360 The manufacturers of R.C. Cola, with 2.1% market

Question

ECN360

The manufacturers of R.C. Cola, with 2.1% market share in the soft drink industry, recently launched a new advertising campaign describing their brand as a “hip alternative” to “corporate colas” like Coke and Pepsi.Why don’t they simply try and gain market share by cutting price? What property of oligopoly markets explains this type of behavior?

ECN360 The manufacturers of R.C. Cola, with 2.1% market


 

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