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Question: An artificial tooth manufacturer sells teeth to distributors through a dealer network. The dealers sell to dental labs, which construct dentures for consumers. The manufacturer has spent a great deal of money advertising its teeth, and it has become the most popular brand of artificial teeth. It is now a dominant firm in the industry. But recently, it has discovered that its rivals are offering very attractive sales incentives for dealers to steer customers toward rival brands. How should the manufacturer respond to this competitive threat? Suggest at least two alternatives.

Microeconomics, Economics

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