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Which of the Following Is an Example of Stackelberg Competition

Question 115

Multiple Choice

Which of the following is an example of Stackelberg competition?


A) Firestone offers rebates to keep its tire prices below Goodyear's.
B) A price war between American Airlines and United Airlines leads both airlines to set ticket prices equal to marginal cost.
C) Natura Pet Products introduced the first grain-free dog food; eventually, other dog food companies entered this market but had to limit their production plans, given Natura Pet Products' sizable market share.
D) GlaxoSmithKline and Pfizer compete in the HIV drug market by annually announcing their production quotas during the second week of January.

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