Frozen Treats and Dairy Treats are two ice cream firms that are competing with each other. If Frozen Treats announces an upcoming price change next month, it may be signaling to Dairy Treats its intent to engage in________ .

Question

Quizplus · Accepted Answer

A price change announcement could be interpreted as a signal of intent to engage in tacit collusion, where the firms coordinate their pricing strategies without explicit communication. The other options (A, C, D) involve specific models of oligopoly behavior that may not apply in this situation.

Frozen Treats and Dairy Treats Are Two Ice Cream Firms