Rather than illegally colluding to raise their prices 20%, two firms can work together to cut their prices 20% through:
A)Dumping.
B)Game theory.
C) A feint.
D) Strategic alliance.

Question

Rather than illegally colluding to raise their prices 20%, two firms can work together to cut their prices 20% through:
A)​Dumping.
B)​Game theory.
C) ​A feint.
D) ​Strategic alliance.

Quizplus · Accepted Answer

A strategic alliance is a cooperative agreement between two or more firms to achieve a common goal. In this case, the two firms can form a strategic alliance to cut their prices by 20%, which benefits both of them and potentially attracts more customers. This is a legal and ethical approach to working together, unlike collusion which is illegal and anticompetitive. Dumping involves selling products below cost to drive out competitors, a feint is a distraction tactic, and game theory is a mathematical approach to understanding strategic interactions between firms.

Rather Than Illegally Colluding to Raise Their Prices 20%, Two