Price signaling in the context of mature industries happens when:
A)the government intervenes to regnlate prices of products.
B)companies decide to invest in slow-growing markets.
C)companies decide to sell its patents to generate revenue.
D)companies increase or decrease product prices to convey their intentions to other companies.
E)a company concentrates on expanding market share in its existing product markets.

Question

Quizplus · Accepted Answer

Price signaling in the context of mature industries refers to companies increasing or decreasing their product prices to convey their intentions to other companies. For example, a company may increase its prices to signal to competitors that it is confident in its product quality and wants to extract higher profits. On the other hand, a company may decrease its prices to signal to competitors that it is willing to compete aggressively in the market.

Price Signaling in the Context of Mature Industries Happens When