Consider the following payoff matrix facing two firms selling the same product in the same market. They must choose whether to price the good at a high or low price. COMPANY B Low PriceHigh PriceCOMPANY A Low PriceA: 2, B: 2A: 4, B: 1 High PriceA: 1, B: 3A: 6, B: 2Given this information:
A. A has a dominant strategy but B does not.
B. B has a dominant strategy but A does not.
C. both A and B have dominant strategies.
D. neither A nor B has a dominant strategy.
Answer: B
You might also like to view...
The Federal Trade Commission was established in 1914 to
A) regulate trade of public goods. B) promote competition in interstate commerce. C) investigate unfair competitive practices. D) prevent non-price competition.
Figure (a) represents the domestic demand and supply of televisions. Suppose free trade is allowed and the current world price of televisions is P1 as shown in Figure (b). Now suppose the domestic government imposes a tariff increasing the domestic price to P2 in Figure (b). This tariff will cause
a. imports to fall from Q2 minus Q1 to Q4 minus Q3.
b. domestic producers to increase their production from Q1 to Q3.
c. domestic consumers to reduce their consumption from Q2 to Q4.
d. All of the above.
Which of the following is NOT a deficit item on the international accounts balance sheet for a country?
A. imports of merchandise B. purchases of foreign currency C. exports of merchandise D. military spending abroad
Which is a good example of an increase in total factor productivity?
A) a tax cut B) good weather C) a company reducing its workforce D) better credit conditions