Asked by Prince Peter on Sep 24, 2024
Verified
After firm A acquired firm B,it lowered the prices for the goods produced by both firms.This can increase profits if the goods are
A) Substitutes
B) Complements
C) Not related
D) None of the above
Acquired Firm
A company that has been purchased and taken over by another company.
Substitutes
are products or services that can replace or be used in place of another, catering to similar needs or functionalities, often influencing consumer choices and market dynamics.
- Determine the effects of market power and competition on pricing decisions.
Verified Answer
AM
Angel Matos Jr5 days ago
Final Answer :
B
Explanation :
When goods are complements, lowering the price of one good can increase the demand for the complementary good, potentially increasing overall profits despite the lower price.
Learning Objectives
- Determine the effects of market power and competition on pricing decisions.