Consider the Matching Pennies Game: Suppose Player a Always

question 27

Multiple Choice

Consider the Matching Pennies game: Suppose Player A always uses a pure strategy that selects heads.What is Player B's optimal response to this pure strategy?

• A)Always select heads.
• B)Always select tails.
• C)Mixed strategy with probability 1/2 on heads and 1/2 on tails
• D)There is no optimal pure or mixed strategy for this situation.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a high level of competition.

Persistent Shortages

An economic condition where the demand for a good or service consistently exceeds its supply, often due to factors like price controls, causing prolonged scarcity.

Normal Goods

Goods for which demand increases as the income of consumers increases.

Incomes

refer to the earnings received by individuals or households, including wages, salaries, benefits, and returns from investments.