Rivalry among competing sellers in a competitive market grows in intensity when:

• A. the number of buyers in the market is very small
• B. products offered by sellers are very similar and buyers can easily switch between them
• C. there are significant barriers to entry for new firms
• D. each seller has substantial market power and can set prices independently

Answer: (B)

Verified step by step guidance

1. Understand the concept of rivalry in a competitive market: Rivalry refers to the intensity of competition among sellers trying to attract buyers.
2. Recognize that rivalry increases when products are very similar because buyers can easily switch from one seller to another, making price and quality competition more intense.
3. Note that a small number of buyers does not necessarily increase rivalry among sellers; it may reduce demand and affect market dynamics differently.
4. Consider that significant barriers to entry usually reduce rivalry because fewer new firms can enter to compete with existing sellers.
5. Understand that when each seller has substantial market power and can set prices independently, the market is less competitive, so rivalry among sellers tends to be lower.