When competing firms have a commitment strategy, it is called:
A)collusion.
B)competitive cooperation.
C)predatory pricing.
D)competition.

Question

Quizplus · Accepted Answer

Collusion refers to an agreement among competing firms to coordinate their actions (e.g., setting prices, production levels) to reduce competition and increase their profits. A commitment strategy in this context implies a form of collusion where firms commit to certain actions to ensure mutual benefit and reduce competitive pressures.

When Competing Firms Have a Commitment Strategy, It Is Called