if-firm-a-in-an-oligopoly-market-decides-to-lower-its-prices-what-is-the-most-li

Question

If Firm A in an oligopoly market decides to lower its prices, what is the most likely response from Firm B, and why?

Accepted Answer

Firm B will lower its prices to remain competitive.

Answer

Firm B will maintain its prices to maximize profits.

Answer

Firm B will increase its prices to differentiate its product.

Answer

Firm B will exit the market due to reduced profitability.