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

question 20

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 above game, in the Nash equilibrium,

• A) Firm A is making $60,000 and Firm B is making $55,000 in economic profit.
• B) Firm A and Firm B are both making $55,000 in economic profit.
• C) Firm A and Firm B are both making $35,000 in economic profit.
• D) Firm A and Firm B are both making $40,000 in economic profit.
• E) Firm A and Firm B are both making $60,000 in economic profit.

---

Definitions:

Behaving

Demonstrating actions or conduct in response to specific stimuli or environments.

Excessively Laugh

Inappropriate or uncontrollable laughter that is excessive and not aligned with the surrounding context or stimuli.

Disheveled Hair

An untidy or unkempt state of hair, often used to describe a person's appearance.

Soiled Clothes

Garments that have become dirty, stained, or contaminated, requiring cleaning or sanitation.