The Payoff Matrix Below Shows the Payoffs for Firm a and Firm

question 6

Multiple Choice

The payoff matrix below shows the payoffs for Firm A and Firm B,each of whom can either "cooperate" or "cheat." The numbers in parentheses are (payoff for A,payoff for B) . $\begin{array}{c}&\text { Firm B }\\\text { Firm A }&\begin{array}{l|cr} & \text { Coop erate } & \text { Cheat } \\\hline \text { Cooperate } & (30,30) & (10, x) \\\text { Cheat } & (x, 10) & (20,20) \end{array}\end{array}$
-Consider the following characteristics of a particular industry: - each firm faces a demand curve with a price elasticity greater than 10 000
- each firm produces at a minimum efficient scale in long- run equilibrium This industry is likely to be

• A)a cartel.
• B)highly concentrated.
• C)monopolistically competitive.
• D)perfectly competitive.
• E)an oligopoly.

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