CIMA E3 Strategic Management E3 Question # 91 Topic 8 Discussion

CIMA E3 Strategic Management E3 Question # 91 Topic 8 Discussion

E3 Exam Topic 8 Question 91 Discussion:
Question #: 91
Topic #: 8

OP and QR are the only two providers of electricity in country S. The demand for electricity is price-inelastic; customers regard electricity as essential and therefore demand does not change significantly if its price changes. However, customers will readily switch suppliers to obtain lower prices.

Applying game theory, select the correct long-term revenue impact for each company for each of the following pricing decisions:

E3 Question 91


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