If a firm in an oligopoly chooses to lower its prices, leading to a price war among competitors, which of the following best explains the underlying cause of this behavior?

In an oligopoly, a few firms dominate the market, and their decisions affect each other. When one firm lowers its prices, it hopes to attract more customers, but this can lead other firms to lower their prices too, starting a price war. This behavior is driven by the desire to gain a larger market share and increase profits, even if it means temporarily lowering prices. For example, if a smartphone company reduces its prices, other companies may quickly follow to avoid losing customers, which can lead to lower profits for all. This situation illustrates the idea of strategic interdependence, where each firm's choices depend on what they expect their competitors to do.