The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU). The owners of the two firms decide to fix the price of bagels. The table below shows how each firm's profit (in dollars) depends on whether they abide by the agreement or cheat on the agreement.
In the Nash equilibrium of this game:
A. both firms cheat on the agreement
B. Bagel World cheats and Bagels 'R' Us abides
C. Bagel World abides and Bagels 'R' Us cheats
D. both firms abide by the agreement
Answer: A
You might also like to view...
If the demand is ________, a fall in price ________ total revenue
A) elastic; increases B) elastic; decreases C) inelastic; increases D) inelastic; does not change
This agency acts like an international lender of last resort to cope with financial instability
A) World Bank B) European Central Bank C) IMF D) International Bank for Reconstruction and Development
The Solow residual attempts to measure the amount of output not explained by
A) technological progress. B) the direct contribution of labor and capital. C) economic projections. D) the amount of a nation's human capital.
On which of the following assets are you most likely to earn interest income?
a. cash and currency b. checkable deposits c. money market deposit accounts d. gold and other precious metals e. All of the above are correct.