Firms that must split the market do so
Understand the Problem
The question appears to pertain to an economic concept related to market structure, likely discussing conditions under which firms share or divide a market. It seeks to understand the rationale or strategies behind market splitting among firms.
Answer
By holding neither price nor distance advantages.
Firms that must split the market do so by holding neither price nor distance advantages over their competitor.
Answer for screen readers
Firms that must split the market do so by holding neither price nor distance advantages over their competitor.
More Information
This arrangement occurs when neither firm can differentiate themselves through price or location, leading to a shared market.
Tips
A common mistake is assuming firms split the market due to proximity or price advantage, but it's usually when neither holds such advantages.
Sources
- Solved Question 50.7 - chegg.com
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