-The above figure shows the payoff to two firms,A and B,of releasing two versions of a new product.What is Firm A's best response if Firm B decides to release the high price version?
A) Firm A does not have a best response strategy.
B) Firm A chooses the low price version.
C) Firm A chooses the high price version.
D) Both low price and high price versions are best responses for firm A.

Question

-The above figure shows the payoff to two firms,A and B,of releasing two versions of a new product.What is Firm A's best response if Firm B decides to release the high price version?
A) Firm A does not have a best response strategy. 
B) Firm A chooses the low price version. 
C) Firm A chooses the high price version. 
D) Both low price and high price versions are best responses for firm A.

Quizplus · Accepted Answer

Given Firm B chooses the high price version, Firm A's best response is to choose the low price version to capture the more price-sensitive segment of the market, maximizing its payoff.

-The Above Figure Shows the Payoff to Two Firms,A and B,of