If Best Paints and Paint with Us are paint suppliers in tacit collusion and Best Paints launches a new advertising campaign that states that it will meet any competitor's price on comparable paint, Best Paints might be tacitly signaling to Paint with Us that they are willing to ________.
A) raise their price
B) lower their price
C) maintain current the price
D) cut price is exactly half
A) raise their price
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Refer to the below payoff matrix. Assume that firm B adopts a low-price strategy while firm A maintains a high-price strategy. Compared to the results from a high-price strategy for both firms, firm B will now:
Answer the question based on the following payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm:
A. Lose $75 million in profit and firm A will gain $50 million in profit
B. Gain $50 million in profit and firm A will lose $50 million in profit
C. Gain $75 million in profit and firm A will lose $50 million in profit
D. Gain $50 million in profit and firm A will lose $75 million in profit
Suppose that a price discriminating monopolist is able to divide its market into two groups. If the firm sells its product for $50 to the group whose customers have the most elastic demand, what price are they likely to charge to the group whose customers have the least elastic demand?
A. $50 B. more than $50 C. less than $50 D. The answer depends on the marginal revenue for that group.