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BusinessBusiness
8 February, 21:18

A trigger strategy is a strategy that:

A. is not relevant to oligopolies.

B. determines when to enter an industry.

C. depends on an opponent's past decisions.

D. tells a business to leave the industry because the price is below the AVC.

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Answers (1)
  1. 8 February, 21:47
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    Answer: C. depends on an opponent's past decisions.

    Explanation:

    A trigger strategy is based on your opponent's past decisions. Essentially it works when a player cooperates with another but then punishes them if they find out that they are no longer cooperating.

    In this strategy, a player intends to maximise profits for both the firms who are colluding.

    If the other player then deviates from the Collusion, the player then changes their strategy based on the Opponent's new strategy. This will then lead them to a Nash Equilibrium where they will earn less than they would have had they continued Colluding.
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Home » Business » A trigger strategy is a strategy that: A. is not relevant to oligopolies. B. determines when to enter an industry. C. depends on an opponent's past decisions. D. tells a business to leave the industry because the price is below the AVC.
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