Consider the Following Game in Which Two Firms Decide How

question 34

Multiple Choice

Consider the following game in which two firms decide how much of a homogeneous good to produce. The annual profit payoffs for each firm are stated in the cell of the game matrix, and Firm A's payoffs appear first in the payoff pairs:

What are the dominant strategies in this game?

• A) Both firms produce low levels of output
• B) Both firms produce high levels of output
• C) Firm A's dominant strategy is to produce low levels of output, but Firm B does not have a dominant strategy.
• D) Firm B's dominant strategy is to produce low levels of output, but Firm A does not have a dominant strategy.
• E) Neither firm has a dominant strategy

---

Definitions:

Plaintiff

The person or party who initiates a lawsuit against another in a court of law.

Defendant

A person, business, or organization being charged or sued in a legal court.

Monetary Compensation

Monetary compensation is financial payment received by an individual or group for services rendered, losses incurred, or as a reward for performance.

Service of Process

The procedure by which a party to a legal action gives an appropriate notice of initial legal action to another party (such as a defendant), court, or administrative body.