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The Following Matrix Shows the Pricing Strategies and Resultant Profits

Question 48

Multiple Choice

The following matrix shows the pricing strategies and resultant profits (in thousands of dollars) for two profit-maximizing firms.
Table 9-1
 Firm B Firm A High  Low  High price 35,3521,41 Low price 37,2130,30\begin{array} {c}\quad\quad \text { Firm B} \\\begin{array}{ | c | c | c | } \hline \text { Firm } \mathrm { A } & \text { High } & \text { Low } \\\hline \text { High price } & 35,35 & 21,41 \\\hline \text { Low price } & 37,21 & 30,30 \\\hline\end{array} \end{array}
-Refer to Table 9-1. If Firm A sets a high price, Firm B will:


A) also set a high price.
B) earn a profit of $35,000.
C) follow the low-price strategy.
D) earn a profit of $30,000.
E) earn a lower profit than Firm A.

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