Chapter 1, Problem 1.15TE

Summary Introduction

Given scenario:

Person X is the owner of a local gym and fitness studio. It has a variety of classes with the latest equipment and Person X worked hard to achieve the loyal customer base. There are three other gyms in the area, which charges $40 per month for individuals, $80 per month for families, and $70 per month for a couple. Person X heard that one of the competitors reducing the charge by $10. However, Person X could not able to afford the price war, as it would not make a profit.

To determine: The form of competition that best characterizes the market.