If Best Paints and Paint with Us Are Competing in a Duopoly

question 13

Multiple Choice

If Best Paints and Paint with Us are competing in a duopoly and it is always best for Best Paints to charge a price of $20 per gallon of paint regardless of the price Paint with Us charges, then charging $20 is ________for Best Paints.

• A)a dominant and pure strategy
• B)a dominant, but not pure strategy
• C)neither a dominant nor pure strategy
• D)a pure, but not dominant strategy

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Definitions:

Price

The sum of money needed to buy a product or service.

Utility Function

A mathematical representation expressing an individual's preference ordering over a set of goods and services, showing the level of satisfaction or utility derived from various bundles of goods.

Indifference Curves

A graph representing combinations of goods among which a consumer is indifferent, used in microeconomics to analyze consumer preferences and decision-making.

Budget Line

A visual representation showing every possible mix of two products that a consumer is able to purchase with their income, taking into account the cost of these items.