Answer:
a. Oligopoly.
b. an economic profit.
c. economic profits will fall.
Step-by-step explanation:
An oligopoly can be defined as a market structure comprising of a small number of firms (sellers) offering identical or similar products, wherein none can limit the significant influence of others.
Hence, it is a market structure that is distinguished by several characteristics, which may either be similar or identical products and dominance by few firms.
The characteristics of an oligopolistic market structure are;
I. Mutual interdependence between the firms.
II. It's a market that is typically controlled by many small firms.
III. Difficult entry to new firms.
In this scenario, a business firm is operating in the United States with only two other competitors in the industry. Thus, the following can be stated about the business firm;
a. It is likely this industry would be characterized as an oligopoly.
b. Firms in this industry will likely earn an economic profit.
c. If foreign firms begin supplying the product, increasing the number of competitors, it is likely that economic profits will fall.
In conclusion, a business firm operating in this industry (oligopolistic market) will likely earn an economic profit. Also, if foreign business firms begin supplying the product, increasing the number of competitors, it is likely that economic profits will fall because the industry is now being competitive and controlled by other business firms.