True/False

Consider two firms, Firm A and Firm B, deciding whether to set a 'High Price' or a 'Low Price' for their competing products. The table below shows the resulting profits (in millions of dollars) for each firm based on their choices. The first number in each pair represents the profit for Firm A, and the second represents the profit for Firm B.

Firm B: High PriceFirm B: Low Price
Firm A: High Price(10, 10)(2, 12)
Firm A: Low Price(12, 2)(5, 5)

True or False: If Firm B decides to set a 'Low Price', Firm A's best response is to set a 'High Price'.

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Updated 2025-08-01

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