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The diagram below that accompanies this question illustrates curves for a firm operating in a differentiated-product oligopoly. One of the demand curves is relevant when

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The diagram below that accompanies this question illustrates curves for a firm operating in a differentiated-product oligopoly. One of the demand curves is relevant when rivals match the firm's price changes; the other demand curve is relevant when rivals do not match price changes.

Suppose the manager believes that rivals will match price cuts but will not match price increase. How many units will the firm sell if it charges a price of $18?

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Pine Marginal Cost ............ Demand A ..................... ............... . MR-B Demand 8 Quantity

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