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Retail grocery business will struggle to be able to raise prices given that their products are...

Retail grocery business will struggle to be able to raise prices given that their products are identical. How do you think firms in these markets will be able to react to changes in the market based on identical products?
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If grocery retailers are able to cover their average variable costs, they will remain in the business.

If grocery retailers are not able to cover their average variable costs,then in long run they will leave the market.

If any 1 retailer increases its price, the other retailers will not change their prices to attract the customers.

If any 1 retailer decreases its price, then all the other firms will decrease their price to not let the customers go to different retailer. But as the product is identical decreasing the price is an unneccessary loss.

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