The following depicts a normal-form game of price competition.Firm AFirm B??Low PriceHigh Price?Low Price0,025,-5?High Price-5,2510,10Suppose the game is infinitely repeated, and the interest rate is 5 percent. Both firms agree to charge a high price, provided no player has charged a low price in the past. If both firms stick to this agreement, then the present value of firm B's payoffs are:
A. 190.
B. 105.
C. 525.
D. 210.
Answer: D
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a. True b. False
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