Author Question: In a kinked demand market, whenever one firm decides to lower its price, a. other firms will ... (Read 76 times)

darbym82 · **on:** Jul 1, 2018

In a kinked demand market, whenever one firm decides to lower its price,
a. other firms will automatically follow.
b. none of the other firms will follow.
c. one half of the firms follow and one half of the firms don't follow the price cut.
d. other firms all decide to exit the industry
e. all of the other firms raise their prices.

Question 2

What's the dominant strategy for each firm?
a. Charge a low price
b. Charge a high price
c. Firm A charge a low price and firm B charge a high price
d. Firm A charge a high price and firm B charge a low price