Use the Following to Answer Questions

question 227

Multiple Choice

Use the following to answer questions:
Figure: Pricing Strategy in Cable TV Market II
-(Figure: Pricing Strategy in Cable TV Market II) Look at the figure Pricing Strategy in Cable TV Market II. The noncooperative equilibrium in the cable TV market occurs when:

• A) CableNorth sets a high price and earns $80,000 per month and CableSouth sets a low price and earns $130,000 per month.
• B) CableNorth sets a low price and earns $130,000 per month and CableSouth sets a high price and earns $80,000 per month.
• C) both firms set a low price and each earns $90,000 per month.
• D) both firms set a high price and each earns $100,000 per month.

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Definitions:

Strategy

A high-level plan or set of actions designed to achieve long-term or overall aims and objectives, often within a competitive environment or to solve a problem.

Support Activities

Functions or operations that help make a business's primary activities more efficient, such as procurement, technology development, human resource management, and firm infrastructure.

Create Value

The process of increasing the worth of products, services or businesses through improvement or innovation.

Differentiation Strategy

A business approach where a company develops unique products or services to stand out from competitors in its market.