Refer to the Information Provided in Table 14 -Refer to Table 14

question 131

Multiple Choice

Refer to the information provided in Table 14.4 below to answer the question that follows.
Table 14.4
B's Strategy
$$\begin{array} { l l l l } \hline & \text { Raise Price } & \text { Don't Raise Price } \\\hline & \text { Raise } \text { A's profit } \$ 6,000 & \text { A's profit } \$ 20,000 \\& \text { Price } \text { B's profit } \$ 6,000 & \text { B's profit } \$ 30,000 \\\text { A's Strategy } & & & \\& \text { Don't A's profit } \$ 30,000 & \text { A's profit } \$ 10,000 \\& \text { Raise } & B ^ { \prime } \text { s profit } \$ 20,000 & \text { B's profit } \$ 10,000\end{array}$$
-Refer to Table 14.4. Firm A?s optimal strategy is

• A) to not raise the price of its product.
• B) to raise the price of its product.
• C) dependent on what Firm B does.
• D) indeterminate from this information, as no information is provided on Firm A?s risk preference.

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Definitions:

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