The Table Below Shows the Payoff (Profit) Matrix of Firm

question 70

Multiple Choice

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms) .Table 12.2

-Which of the following is true of price leadership?

• A)Price leadership requires that firms collude.
• B)Price leadership will not exist when there is a dominant firm.
• C)Price leadership may come into being as firms recognize the benefits of not engaging in competitive pricing.
• D)Price leadership is most likely to arise when no firm has a history of making accurate evaluations of market conditions.
• E)Price leadership is never used in the real world.

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Definitions:

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