Hi guys, i got very confused by the answer of this question from official curriculum:
Q: Over time, the market share of the dominant company in an oligopolistic market will most likely :
C. remain the same
My thoughts : in an oligopolistic market, the dominant company’s market share will INCREASE as price war between other companies ruling out some small players. But the answer from curriculum says market share of the dominant company will DECREASE as profits attract new entries. To me, it is only a short-term thing that market share of the dominant decrease, on long-run, the market will reorganise as the dominant reduce price and rule out the small players so as to take back its market share. So the correct answer for me is A or C (if two effects offset each other).
Can someone tell me what as I missing pls ?
Thanks in advance,