A collusive agreement between two duopolists is similar to the prisoners' dilemma because in both games
A) the best outcome is always achieved.
B) each players strategy depends on what the other player does.
C) the Nash equilibrium is not the best outcome for the players.
D) All of the above answers are correct.
C
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Which of the following is an example of a durable strategy undertaken by firms to prevent competition?
a. Purchasing the latest technology available in the market b. A firm spending huge sums on advertisements. c. Selecting a unique location for carrying out operation d. Identifying a competent sales force
The "law of supply" states that, other things remaining the same, firms produce
A) more of a good the less it costs to produce it.
B) less of a good the more it costs to produce it.
C) more of a good the higher its price.
D) less of a good as the required resources become scarcer
Empirical evidence suggests that the relationship between a firm’s investment and its stock prices is
a) strongly negative b) weakly negative c) nonexistent; the two variables are independent d) weakly positive e) strongly positive
Contractionary monetary policy:
A. increases the U.S. interest rate and decreases the U.S. exchange rate. B. increases the U.S. interest rate and increases the U.S. exchange rate. C. lowers the U.S. interest rate and increases the U.S. exchange rate. D. lowers the U.S. interest rate and decreases the U.S. exchange rate.