In a market where Firm A and Firm B are leading suppliers,if Firm A initiates a price cut,the likelihood that Firm B responds with an identical price cut will be greater:
A)If Firm B's medium term goal is to maximize profit.
B)If Firm B's medium term goal is to maximize market share.
C)If Firm B is a private rather than a public (listed)company.
D)If the market is growing.

Question

Quizplus · Accepted Answer

If Firm B's medium term goal is to maximize market share, it is more likely to match Firm A's price cut to maintain or increase its market share.

In a Market Where Firm a and Firm B Are