What oligopolist pricing theory is based on firm awareness of how competing firms will react to actions it takes and develops strategies based on that reaction?
A) game theory
B) profit-maximizing theory
C) price leadership theory
D) price discrimination theory
E) theory of competition

Question

Quizplus · Accepted Answer

Game theory involves strategic decision-making with the understanding of competitors' potential reactions to actions, which is essential in oligopolistic markets where a few firms dominate and are highly interdependent in their pricing and output strategies.

What Oligopolist Pricing Theory Is Based on Firm Awareness of How