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If an Oligopolist Reduces the Price of Its Product

Question 26

Multiple Choice

If an oligopolist reduces the price of its product:


A) It may get some customers to switch from rival firms if they don't respond by reducing their prices.
B) It may not get some customers to switch from rival firms if they respond by reducing their prices.
C) It does not know whether its profits will rise or fall without knowing how rivals will change their prices in response.
D) All of the above are true.

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