Scenario 13.16 Consider the Pricing Game Below

question 39

Multiple Choice

Scenario 13.16
Consider the pricing game below:
-Refer to Scenario 13.16. If Gooi can move first, and Ici threatens to buy yogurt machines, no matter what Gooi does,

• A) Gooi will have to buy gelato machines, so Ici will get its highest possible profit.
• B) Gooi will buy yogurt machines, which it otherwise wouldn't have, in order to retaliate.
• C) the equilibrium payoff of ($50,$50) will be enforced.
• D) Gooi will not change its behavior, because Ici's threat is not credible.
• E) Gooi will threaten to buy yogurt machines, no matter what Ici does, to see whether that will get the people at Ici to change their minds.

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Definitions:

Bilateral Contract

A legal agreement where each party promises to perform an act in exchange for the other party's act.

Express Contract

A contract in which both parties accept mutual obligations through either oral discussion or written communication.

Web Page

A document on the World Wide Web that can contain text, images, links, and multimedia content, accessible through a web browser.

Mutual Assent

Mutual assent is a principle in contract law that states an agreement must involve a clear offer and acceptance between parties to be legally binding.