The Following Table Depicts Two Firms in a Single-Stage Duopoly

question 86

Multiple Choice

The following table depicts two firms in a single-stage duopoly game.Each firm makes its decision without knowledge of the other firm's decision.The payoffs for each firm represent economic profits,and each firm strictly prefers more economic profit than less.If X is greater than $3,500,then there is/are

• A) only one Nash equilibrium,and this game would be considered a prisoner's dilemma.
• B) two Nash equilibriums,and this game would be considered a prisoner's dilemma.
• C) three Nash equilibriums,and this game would be considered a prisoner's dilemma.
• D) only one Nash equilibrium,and this game would not be considered a prisoner's dilemma.
• E) two Nash equilibriums,and this game would not be considered a prisoner's dilemma.

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Definitions:

Goodness-Of-Fit Test

A statistical test used to determine how well observed sample data fit a distribution from a population with a normal distribution.

Expected Frequency

The number of times an outcome is predicted to occur in an experiment or trial based on probability theory.

Normal Distribution

A distribution of probability that is even around the average, indicating that observations close to the mean are more common than those further away.

Chi-Square Distribution

A statistical distribution used for hypothesis testing that is derived from the sum of squared variables that follow a normal distribution.