??Firm 2???High PriceLow PriceFirm 1High PriceFirm 1 earns $100; Firm 2 earns $100Firm 1 earns $25; Firm 2 earns $150?Low PriceFirm 1 earns $150; Firm 2 earns $25Firm 1 earns $50; Firm 2 earns $50Table 12.2In the game shown in Table 12.2, when the firms choose their dominant strategies:
A. profits are lower than when the firms choose the strategy that is not the dominant strategy.
B. the firms will make the highest profit.
C. the firms will have an incentive to choose the other strategy in the next round.
D. it is evidence that the firms are implicitly or explicitly fixing prices.
Answer: A
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A) $10 million. B) $20 million. C) $60 million. D) zero.
If the price of refillable butane lighters was to decrease, then
A) the quantity of butane demanded would increase. B) the demand for butane would decrease. C) the demand for butane would increase. D) the quantity of butane demanded would decrease.
The term "derived demand" refers to
A) a firm's estimated demand curve derived from sales data. B) the demand for a factor of production that is derived from the demand for the good the factor produces. C) the demand for financial products called derivatives. D) a demand curve that derives from the availability of resources.
The provision of a legal system is an important economic function of the government because
A) lawyers and judges tend to be high-income people. B) people need to feel safe when they go to work. C) the legal system affects how exchange takes place through its enforcement of contracts. D) the legal system affects the distribution of income through its awarding of damages in accident claims.