Refer to the figure at right. Two firms operating in the same market must choose between a collude price and a cheat price. Firm A's profit is listed before the comma, B's outcome after the comma. If each firm tries to choose a price that is best for it, regardless of the other firm's price, which of these statements is correct? OA. Both firms should charge a cheat price. OB. Firm A should charge the collude price; Firm B should charge a cheat price. OC. Both firms should charge a collude price. D. Firm A should charge a cheat price; Firm B should charge a collude price. O Cheat Price Firm A Firm B Cheat Price Collude Price Collude Price 18, 18 6,30 30, 6 24,24

Refer to the figure at right. Two firms operating in the same market must choose between a collude price and a cheat price. Firm A's profit is listed before the comma, B's outcome after the comma. If each firm tries to choose a price that is best for it, regardless of the other firm's price, which of these statements is correct? OA. Both firms should charge a cheat price. OB. Firm A should charge the collude price; Firm B should charge a cheat price. OC. Both firms should charge a collude price. D. Firm A should charge a cheat price; Firm B should charge a collude price. O Cheat Price Firm A Firm B Cheat Price Collude Price Collude Price 18, 18 6,30 30, 6 24,24

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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