The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2

-Actions that allow oligopoly firms to coordinate their pricing behavior without explicit collusion are referred to as _____.
A)strategic behavior
B)differential pricing strategies
C)facilitating practices
D)duopoly price discrimination mechanisms
E)independent practices

Question

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2
 
-Actions that allow oligopoly firms to coordinate their pricing behavior without explicit collusion are referred to as _____.
A)strategic behavior 
B)differential pricing strategies 
C)facilitating practices 
D)duopoly price discrimination mechanisms 
E)independent practices

Quizplus · Accepted Answer

Facilitating practices are actions taken by firms to coordinate their pricing behavior without explicit collusion, such as setting industry-wide pricing standards or adopting a leader-follower pricing strategy. This allows firms in an oligopolistic market to increase their profitability by reducing price competition and maintaining higher prices. Other choices are either incorrect or not relevant to the given scenario.

The Table Below Shows the Payoff (Profit) Matrix of Firm