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:

Lewis Structure

A diagrammatic method for representing the valence electrons of atoms within a molecule, indicating bonds between them.

Ozone

A molecule made of three oxygen atoms, O3, forming a layer in the Earth's stratosphere that protects life by absorbing most of the sun's harmful ultraviolet radiation.

Resonance Structures

Representations of a molecule showing different configurations of electron pairs, to depict delocalization of electrons within the molecule.

Nitrite Ion

A polyatomic ion with the molecular formula NO2-, derived from nitrous acid.