Intel Is Ready to Introduce Its New Microprocessor

question 4

Multiple Choice

Intel is ready to introduce its new microprocessor.In chip manufacturing,as more chips are produced,production yields rise.Thus,Intel can choose between a below-cost pricing strategy (upper branch) to reach the higher-yield zone more quickly,or an above-cost pricing strategy (lower branch) and move to the higher-yield zone more slowly.AMD will introduce its new microprocessor two months after Intel,and faces the same below-cost (upper branch) and above-cost (lower branch) strategies.Writing out the outcomes on the decision tree might prove helpful as you answer the following questions.
-Refer to the decision tree above.AMD will

• A) never choose below-cost pricing.
• B) always choose above-cost pricing.
• C) always choose below-cost pricing.
• D) choose below-cost pricing only if Intel picks above-cost pricing.
• E) choose above-cost pricing if Intel picks above-cost pricing.

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