Use the following setup for the question.
Assume a simultaneous-move game.

-What is the best response of firm A,given firm B is charging a High Price?
A)Charge a low price
B)Charge a high price
C)Charge zero,give the good away
D)All of the above

Question

​Use the following setup for the question.
Assume a simultaneous-move game.
 
-​What is the best response of firm A,given firm B is charging a High Price?
A)​Charge a low price 
B)Charge a high price 
C)Charge zero,give the good away 
D)​All of the above

Quizplus · Accepted Answer

In a simultaneous-move game, both firms make their decisions simultaneously without knowing the decision of the other firm. If firm B charges a high price, firm A's best response is to charge a low price. This is because charging a high price will result in losing customers to firm B, and charging zero is not a profitable strategy. Therefore, the best response of firm A is to charge a low price. Option B and C are not the best choices. Option D is incorrect as not all the options are the best response.

​Use the Following Setup for the Question

Use the Following Setup for the Question