n

Consider a firm that has incurred a sunk cost of producing 100 units of good x at $100 (in millions) and earned profits of $48 (in millions). The firm was charging consumers $42 a unit knowing that consumers are price inelastic. The profits the firm earned was based on selling 85 units. The firm offers to sell that product to low-income consumers at a 35% discount. What strategy did the firm employ? (a) Grim-trigger strategy. (b) Price - discrimination. (c) Tit for tat. (d) Baruch's Law. (e) None of the above.