Game Theory suggests that competing firms in an oligopolistic industry may be: t
ID: 1097024 • Letter: G
Question
Game Theory suggests that competing firms in an oligopolistic industry may be:
too quick to raise prices because they fail to anticipate that rivals may gain market shares.
reluctant to change prices because they anticipate that rivals will match price cuts but
ignore price increases.
reluctant to change prices because they anticipate that rivals will ignore price cuts but
match price increases.
too quick to cut prices because they fail to anticipate that rivals may also cut their prices.
a.too quick to raise prices because they fail to anticipate that rivals may gain market shares.
b.reluctant to change prices because they anticipate that rivals will match price cuts but
ignore price increases.
reluctant to change prices because they anticipate that rivals will ignore price cuts but
match price increases.
too quick to cut prices because they fail to anticipate that rivals may also cut their prices.
Explanation / Answer
B - reluctant to change prices because they anticipate that rivals will match price cuts but ignore price increases.
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