For each of the following statements concerning the role of strategic thinking i

Question

For each of the following statements concerning the role of strategic thinking in management decisions, explain whether the statement is true or false.

A. "Managers of firms operating in perfectly competitive markets need to 'get into the heads' of rival managers in order to make more profitable decisions."

B. "Strategic thinking by managers in oligopolistic industries promotes rational decision making, which will increase total industry profit."

C. "Despite the interdependent nature of profits, oligopoly managers have the same goal as perfect competitors, monopolists, and monopolistic competitors."

Explanation / Answer

A) False In perfect competition firms can sell all they can produce at a predetermined market price so there is no need to strategize against rival firms. B) True, if oligopolists can collude and limit production to keep prices up, they can maximize total industry profit. C) True, they all want to maximize their profits.

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