Multiple Choice
Refer to the profits-payoff table for a duopoly. If initially firm X's price was $6 and Y's price was $5,
A) X would find it profitable to cut its price, provided Y also cut its price.
B) Y would find it profitable to cut its price, provided X also cut its price.
C) Y would find it profitable to raise its price by $1, provided X would also raise its price by $1.
D) both firms would profit by simultaneously lowering their prices by $1.
Correct Answer:
Verified
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