Your firm competes in a local duopoly. You’ve hired consultants to examine how your rival responds to changes in your prices. To do this, over a period of time, your consultants helped your firm to experiment with different price points and observe your rival’s
response.

a. Using these data, determine how your competitor’s price responds to yours.

b. Based on your findings in part a, with what model of oligopoly are these data most consistent?

c. What additional information or findings would help confirm your answer to part b? Explain.