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Firm A and Firm B are competitors. Each firm can set a high price, a medium price, or a low price. These prices must be
Firm A and Firm B are competitors. Each firm can set a high price, a medium price, or a low price. These prices must be set independently, and Firm A must set its price first. The adjacent game tree shows their profits from different prices. What will be the outcome and why? O A. Firm A sets a medium price, and Firm B sets a high price. At this node, Firm A maximizes profit by choosing its best response to Firm B's best response strategies. O B. Both Firm A and Firm B will set a medium price. At this node, Firm A maximizes profit by choosing its best response to Firm B's best response strategies. O C. Both Firm A and Firm B will set a high price. At this node, Firm B maximizes profit by choosing its best response to Firm A's strategy. O D. Firm A sets a high price, and Firm B sets a low price. At this node, Firm B chooses its strategy such that Firm A suffers a loss. Type here to search O Esc F2 F4 MX F5 F6 F7 a FFF $ % 2 3 4 5 6 ab Q W E R T
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