A situation in which one firm's actions with respect to price, quality, advertising and related changes may be strategically countered by the reactions of one or more other firms in the industry is known as
A) strategic dependence.
B) economies of scale.
C) the concentration ratio.
D) barriers to entry.

Question

Quizplus · Accepted Answer

The situation described is known as strategic dependence, which occurs when firms in an industry are interdependent and their actions are strategically countered by their competitors. This can lead to a complex game of strategy and can have significant implications for the pricing, quality, advertising, and related decisions of the firms involved. Option B refers to a different concept related to cost advantages from producing at a larger scale. Option C refers to a measure of market concentration based on the market share of the top firms in an industry. Option D refers to factors that make it difficult for new firms to enter an industry.

A Situation in Which One Firm's Actions with Respect to Price