Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor Toysorama is mass producing an excellent copy and plans to flood the market with their $5 doll in 6 weeks. Funsters should
a. “fight fire with fire” by decreasing supply of its doll for 6 weeks and then increasing the supply.
b. increase the supply of their doll now before the other doll hits the market.
c. increase the price of their doll now.
d. discontinue their doll.
Answer: b. increase the supply of their doll now before the other doll hits the market.
Economics
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