question archive Firm A is competing in prices with firm B, which sells a somewhat different product
Subject:EconomicsPrice:2.87 Bought7
Firm A is competing in prices with firm B, which sells a somewhat different product. Firm A can invest to reduce its costs. Demonstrate with a simple graph how Firm A will underinvest/overinvest (choose one) in cost reduction, compared to the situation in which there would be no strategic effect on firm B's pricing.
Purchased 7 times