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In an oligopoly, the market is dominated by a few large producers of a homogeneous or differentiated product. Because of their "fewness," oligopolies have considerable control over their prices, but each must consider the possible reaction of rivals to its own pricing, output, and advertising decisions (McConnell & Brue, 2005). Since there are many substitutes, Wendy's has to be willing to keep their prices and quality of food relative to competitors.
McDonalds and Burger King offer substitutes to Wendy's food. Advertising and promotional offers can help Wendy's stay competitive. Wendy's also has to be observant of economic trends...
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