ars Sony and LG each announced that profits would be lower than oxpected bec aus

Question

ars Sony and LG each announced that profits would be lower than oxpected bec ause of reciucnd prices for 4KHD and 30 televison sets. What might theexplain the reason why the firms didn't just raise the price to imorove ther profits? the O A. The move to cut prices is probably just a lemporary one to gain market share in the long run tho frms willrase prices and be able to increase their profits DiB. Most il, rtens competion betuen theoe to magor roducens pretably suaied prices doun Thereau wach eare w customers to the other if it raised its pnces OC. The frms are stll making profits, just not as high as expected so thare is room to lower prices until one can fünce the other out of business nks OD. In perfect competition, prices are determined by the market and firms will keep lowering prices unta there are no profits to be eaned lk ne

Explanation / Answer

Right answer is (C)

This is oligopoly like situation where few selected firms compete intensively. If one firm increases price level, it will potentially lose its customers to its competitors. Hence, overall profit shall be compromised.

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