Suppose a firm can charge a relatively low price to try to compete actively with its rivals, or it can charge a relatively high, collusive price. If its strategy is to charge the low price regardless of the other firms' decisions, this low-price is the firm's
A) dependent strategy.
B) independent strategy.
C) dominant strategy.
D) positive sum strategy.

Question

Quizplus · Accepted Answer

A dominant strategy is one that is the best choice for a firm, regardless of what strategies other firms choose. In this case, choosing the low price regardless of the other firms' decisions is considered a dominant strategy because it is selected without consideration of the rivals' actions.

Suppose a Firm Can Charge a Relatively Low Price to Try