If you know that a competitor will lower their price if you lower your price, do...

 

Transcribed Image Text:

If you know that a competitor will lower their price if you lower your price, do you then have any incentive to lower your price? Please explain. Price 110 100- 90- 80 70 60 50 40 30 20 10 0 0 1 2 3 4 MR MC = AC D 5 6 7 8 9 10 11 12 13 14 15 Quantity If you know that a competitor will lower their price if you lower your price, do you then have any incentive to lower your price? Please explain. Price 110 100- 90- 80 70 60 50 40 30 20 10 0 0 1 2 3 4 MR MC = AC D 5 6 7 8 9 10 11 12 13 14 15 Quantity

Answer rating: 100% (QA)

The image you sent is an illustration of a price warwhich is a situation in which two or more firms competing in the same market repeatedly lower thei... View the full answer