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If an Oligopolist Is Naïve, and Therefore Expect Rivals Not

Question 33

Multiple Choice

If an oligopolist is naïve, and therefore expect rivals not to respond if it chooses to cut its price,


A) It could start a price war
B) It would be more likely to cut prices than an oligopolist that expected rivals to react if it cut its prices.
C) It would be less likely to cut prices than an oligopolist that expected rivals to react if it cut its prices.
D) Both a. and b. are true

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