The study of how decisions are made when strategic interaction between firms exists is known as
A) Game theory.
B) Contestable market theory.
C) Market power theory.
D) Predatory pricing theory.

Question

Quizplus · Accepted Answer

The study of strategic interaction between firms, where decisions are made based on the actions of other firms, is known as game theory. Game theory can be used to analyze various business decisions such as pricing, advertising, and market entry. The other options, contestable market theory, market power theory, and predatory pricing theory, all relate to different concepts and theories in economics but do not specifically focus on strategic interactions between firms.

The Study of How Decisions Are Made When Strategic Interaction