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Question
A car company ‘W’ hired an international cricket player for its endorsement in India, while two other car companies’ ‘Y’ and ‘R’ hired two famous Bollywood film stars for this purpose. Explain the features of the competitive market indicated above.
Answer in Brief
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Solution
It is a sales promotion measure in view of intense competition and interdependence of firms under oligopoly. Every firm under this market form enjoys a large market share due to small number of firms. Every firm’s action affects its rival firms. So, while taking decisions, a firm has to take into account the impact on and reaction of its rivals. This phenomenon has been reflected in the example.
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