If MiiTunes and The Rock Shop are both in the music business and faced with the choices outlined in the figure shown, we can predict the outcome will be that:
This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
A. MiiTunes charges low prices and The Rock Shop does not enter.
B. MiiTunes charges high prices and The Rock Shop enters.
C. MiiTunes charges high prices and The Rock Shop does not enter.
D. MiiTunes charges low prices and The Rock Shop enters.
B. MiiTunes charges high prices and The Rock Shop enters.
You might also like to view...
Which of the following will most likely happen when better technology is used in production?
A) an upward movement along the production possibilities curve B) an outward shift of the production possibilities curve C) an inward shift of the production possibilities curve D) a downward movement along the production possibilities curve
Vertical equity refers to the idea that
A. people with greater ability to pay should pay more. B. people who are situated differently should pay differently but in a manner deemed fair by society. C. people who are situated equally should pay equally. D. the people who derive the benefits from services should be the ones who pay for the services, provided they have the ability to pay.