-The Only Two Firms in a Market Are Trying to Decide

question 51

Multiple Choice

-The only two firms in a market are trying to decide what price to charge. The payoff matrix for this duopoly game is shown above. The payoffs are thousands of dollars of economic profit. In the Nash equilibrium, Firm A will set a price of ________ and Firm B will set a price of ________.

• A) $20; $20
• B) $10; $10
• C) $10; $20
• D) $20; $10
• E) $20; something, but more information is needed to determine Firm B's price

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Definitions:

Morphemes

The smallest grammatical unit in a language. A morpheme is not necessarily the same as a word. It may or may not stand alone, but it contributes meaning to a word.

Phonemes

The basic and distinct units of sound in a specified language that distinguish one word from another.

Semantics

The branch of linguistics and logic concerned with meaning, including the study of signs, symbols, language, and their significant content.

Psycholinguistics

The study of how language is acquired, produced, and used and how the sounds and symbols of language are translated into meaning.