If a Firm Perceived That the Other Firm in an Implicit

question 145

Multiple Choice

If a firm perceived that the other firm in an implicit pricing agreement dropped its price in an attempt to gain market share then its most likely response would be to

• A) merge with the other firm.
• B) engage in a price war.
• C) raise price to punish the other firm.
• D) keep its price the same.

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Definitions:

Gratuitous Assignment

The transfer of rights or property from one party to another without any exchange of value or consideration.

Assignee's Assent

The agreement or acceptance by the assignee to accept the terms and conditions of an assignment.

Valid

Having legal force, binding, or enforceable; conforming to the law or to established legal forms and requirements.

Donee Beneficiaries

Individuals or entities intended by the parties in a contract to receive benefits from the agreement's performance without being directly involved in the contract.