Homework Answers
Ans.-(C)
Let initially X and Y were charging a high price and both of them
had sales of $625000 each. Now suppose X cuts its price but Y
continues to charge high price, then X has sales of $725000 and Y
has sales of $275000. So, the firm with a lower price will
experience an increase in its sales.
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indicate the profit in millions of dollars for an oligopoly based
on either a high-price or a low-price strategy.
a. Situation
1: Each firm chooses a high-price
strategy.
Result: Each firm
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indicate the profit in millions of dollars for an oligopoly based
on either a high-price or a low-price strategy.
a. Situation
1: Each firm chooses a high-price
strategy.
Result: Each firm
will earn $ 200 million in profit for a total of $ 400 million for
the two firms.
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low-price strategy while Firm Y maintains a high-price
strategy.
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