Question

Briefly discuss the importance of Selling Cost under oligopoly market.

Answer 1

In oligopoly marketplaces, where there are few dominant firms and intense rivalry, selling costs are significant. In oligopolies, selling expenses help companies participate in non-price rivalry by means of marketing and promotion, therefore promoting product differentiation rather than setting off price wars. High selling prices also present access challenges. These are strategic costs that affect the behaviour of rivals in a market where firms are interdependent.