Tit-for-tat--meaning if you raise your price, I'll match you by raising mine, and if you lower your price, I'll match you by lowering mine--seems to be a win/win strategy for both firms competing in a balanced oligopoly industry. So why does it not always end up as a win/win situation for them?
Answer to relevant QuestionsExplain the difference between two firms merging and two firms engaging in a joint venture. Lean Cuisine and Healthy Choice can charge either $4 or $2 for their microwave-ready, frozen diet foods. Using the accompanying payoff matrix, and assuming for each a pricing strategy that avoids the worst-case scenario, ...Why do some economists argue in favor of antitrust laws? What assumptions do they make concerning economies of scale? Everyone knows that cigarette smoking is harmful to your health. But is it also harmful to people who live or work among smokers? Discuss this issue in terms of the third-party economic externalities created and their ...Canadians are worried. Many of their bright and educated young people head south to the United States to find employment. Why would they do that?
Post your question