Which one of the following is NOT a retaliation strategy that firms would apply to one that cheated on a price-fixing scheme by selling at a price below the agreed-upon fixed price?
A) All other firms sell at the same low price as the cheating firm.
B) All other firms sell at a price that ensures zero economic profit for all firms.
C) Each period, all other firms sell at the price picked by the cheater in the previous period.
D) All other firms would reduce their output.
Correct Answer:
Verified
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