Question

The clothing and attire retail market has seen an increased number of firms entering the industry. Thus, there is a lot of competition in markets for many types of clothing. What is the result of this high amount of competition?

A.Individual buyers and sellers cannot affect the market price.
B.Firms have a lot of flexibility in pricing their products.
C.One individual firm can determine the market price.
D.Some firms must necessarily leave since the prices will be too low.

Answer 1

Competition in the clothing retail market leads to flexible pricing, improved product quality, and the possibility of some firms exiting the market. The correct option is A.

Step-by-step explanation:

Competition in the clothing and attire retail market leads to several outcomes. One result of high competition is that firms have a lot of flexibility in pricing their products.

They can lower prices to attract customers or offer discounts and promotions to stand out from their competitors. Additionally, competition can lead to improved product quality as businesses strive to differentiate themselves.

However, due to the intense competition, some firms may be forced to leave the market if they are unable to sustain low prices or provide unique value to customers. Overall, competition in the clothing retail industry benefits consumers by offering a wide range of choices and potentially lower prices. The correct option is A.