Firms A and B are within an oligopolistic market. Firm A lowers the price for on

Question

Firms A and B are within an oligopolistic market. Firm A lowers the price for one of their goods and in retaliation, Firm B decides to set a policy that will keep the price for one of its goods lower than Firm A's. Based on the given information, which statement is true?

Firm B has higher variable costs.

Firm A will have higher labor costs.

Firm B is engaging in a grim trigger response.

Firm B is engaging in a trembling hand trigger response.

Firms A and B are within an oligopolistic market. Firm A lowers the price for one of their goods and in retaliation, Firm B decides to set a policy that will keep the price for one of its goods lower than Firm A's. Based on the given information, which statement is true?

Firm B has higher variable costs.

Firm A will have higher labor costs.

Firm B is engaging in a grim trigger response.

Firm B is engaging in a trembling hand trigger response.

Explanation / Answer

Firm B is engaging in a grim trigger response.

the above is the answer

because here A is likely to again change its prices to lower levels.

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.