Refer to the information provided in Table 14.1 below to answer the question that follows.
Table 14.1B's Strategy
?Raise PriceDon't Raise Price?RaiseA's profit $3,000A's profit $10,000?PriceB's profit $3,000B's profit $15,000A's Strategy????Don'tA's profit $15,000A's profit $5,000?RaiseB's profit $10,000B's profit $5,000Refer to Table 14.1. Firm A?s optimal strategy is

A. to not raise the price of its product.
B. dependent on what Firm B does.
C. to raise the price of its product.
D. indeterminate from this information, as no information is provided on Firm A?s risk preference.


Answer: B

Economics

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