Key Insight The effect of a price reduction on the quantity demanded of your product depends upon whether your rivals respond by cutting their prices too The effect of a price increase on the quantity demanded of your product depends upon whether your rivals respond by raising their prices too! Strategic interdependence: You arent in complete control of your own destiny Michael R Baye, Managerial Economics and Business Strategy, 3e. CThe McGraw-Hill Companies, Inc, 1999Michael R. Baye, Managerial Economics and Business Strategy, 3e. ©The McGraw-Hill Companies, Inc. , 1999 Key Insight • The effect of a price reduction on the quantity demanded of your product depends upon whether your rivals respond by cutting their prices too! • The effect of a price increase on the quantity demanded of your product depends upon whether your rivals respond by raising their prices too! • Strategic interdependence: You aren’t in complete control of your own destiny!