Oligopolistic reaction

Hey there kiddo, do you know what an oligopoly is? No worries if you don't, I'll explain it to you.

An oligopoly is when a small group of companies control most of the market for a particular product or service. For example, if there are only three major grocery stores in your town, they might have an oligopoly over the grocery market.

Now, these companies in an oligopoly are constantly watching each other and reacting to what the others are doing, kind of like when you play "follow the leader" with your friends. This is what we call "oligopolistic reaction".

Let me give you an example. Imagine there are two major soda companies, let's call them "Co-Cola" and "Pepsi". If Co-Cola decides to lower the price of their soda, Pepsi might feel like they have to lower their price too in order to compete. This is called a "price war", and it can happen when companies in an oligopoly try to one-up each other.

Another example is when a company releases a new product or makes a big change. The other companies in the oligopoly might react by releasing their own version of that product or making similar changes to their products.

So there you have it, kiddo. Oligopolistic reaction is when companies in an oligopoly constantly watch and react to what their competitors are doing, like playing a game of follow the leader.