Use the Table Below to Answer the Following Question

question 5

Multiple Choice

Use the table below to answer the following question.
Table 14.3.1
-Consider the game shown in Table 14.3.1 based on potential gas prices between two competitors.The game is played repeatedly and the result is a cooperative equilibrium.The payoffs in the table show the economic profit of the firms.The most likely outcome is

• A)a cycle of first $0.95/litre,then $1.15/litre,etc.
• B)Hare sets her prices at $1.15/litre,and Turtle sets his at $0.95/litre.
• C)Hare sets her prices at $0.95/litre,and Turtle sets his at $1.15/litre.
• D)both set their prices at $1.15/litre.
• E)both set their prices at $0.95/litre.

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Definitions:

Preferred Stockholders

Investors who own preferred shares in a company, with rights to dividends before common stockholders and priority in asset distribution.

Dividends in Arrears

Dividends on preferred stock that have been declared but not paid to shareholders.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall market capitalization remains the same.