If one duopolist chooses the highest price it will maximize its profit.

Name: If one duopolist chooses the highest price it will maximize its profit.
Brand: Quizplus
Rating: 4.8 (46 reviews)

Question

Quizplus · Accepted Answer

If one duopolist chooses the highest price, the other duopolist may choose to undercut them and capture the market share, resulting in lower profits for the first duopolist. Therefore, the optimal strategy for the duopolists is to coordinate on a price and share the market. This is known as a Nash equilibrium.

If One Duopolist Chooses the Highest Price It Will Maximize