(Figure: Oligopoly Pricing Strategy in Wireless TV Market II) Use Figure: Oligopoly Pricing Strategy in Wireless TV Market II. The BEST response for Sling:

A)is to charge a high price.
B)is to charge a low price.
C)is to charge what Spectrum does.
D)does not exist.

Question

(Figure: Oligopoly Pricing Strategy in Wireless TV Market II) Use Figure: Oligopoly Pricing Strategy in Wireless TV Market II. The BEST response for Sling:
​
 
A)is to charge a high price. 
B)is to charge a low price. 
C)is to charge what Spectrum does. 
D)does not exist.

Quizplus · Accepted Answer

Sling's best response is to charge a low price, as indicated by the Nash equilibrium in the lower left corner of the graph. This allows them to capture a significant market share while still earning a profit. Charging a high price may result in losing customers to competitors, while charging the same price as Spectrum would not provide a competitive advantage.