Consider the Following Output-Choice Game for Two Firms

question 7

Multiple Choice

Consider the following output-choice game for two firms:

What is the outcome of the game if both firms use maximin strategies?

• A) Both firms choose low output levels.
• B) Both firms choose medium output levels.
• C) There is no clear outcome under a maximin strategy for both firms.
• D) There are two possible maximin outcomes --- Firm 1 chooses medium and Firm 2 chooses low, or Firm 1 chooses low and Firm 2 chooses medium.

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