Answer the next question based on the following payoff matrix for a duopoly. The numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. Firm X? High PriceLow PriceFirm YHigh priceX = $625X = $725??Y = $625Y = $475?Low priceX = $475X = $400??Y = $725Y = $400Refer to the above payoff matrix. Assume that firm Y adopts a low-price strategy while firm X maintains a high-price strategy. Compared to the results from a high-price strategy for both firms, firm Y will now:
A. lose $150,000 in profit and firm X will gain $150,000 in profit.
B. gain $100,000 in profit and firm X will lose $150,000 in profit.
C. gain $150,000 in profit and firm X will lose $100,000 in profit.
D. gain $525,000 in profit and firm X will lose $275,000 in profit.
Answer: B
You might also like to view...
A call option has a strike price of $48. If the underlying stock is selling for $45 on the expiration date, the intrinsic value of the call option is __________ per share
A) $93 B) $45 C) $3 D) $0
The point price elasticity of demand is -1/2. The price of the product increases from $1.00 to $1.10. Given the information in Scenario 4.3, the quantity demanded will decrease by approximately:
A) 5 units. B) 5 percent. C) 10 units. D) 10 percent. E) none of the above
Identify the direction of the change during a recession in each of the following: consumption expenditures, investment expenditures, and unemployment
To calculate real GDP, we
A. Adjust the market value of goods and services for changing prices. B. Measure in the prices of goods and services of that period. C. Estimate future prices of goods and services. D. None of the choices are correct.