Assume That Hines Corporation and Lamb Inc

Multiple Choice

Assume that Hines Corporation and Lamb Inc. ,each produce a homogeneous product and that the two firms are the only two sellers in the market.The two firms have agreed to a collusive price agreement and expect demand and cost conditions to remain unchanged over time.If the pricing game is repeated indefinitely and Hines knows that Lamb is playing a tit-for-tat strategy,then Hines' best strategy is to:

A) cut price in every period.
B) cut price in alternate periods.
C) comply with the agreement.
D) increase price in alternative periods.