Table 14-2 Table 14-2 Shows the Payoff Matrix for Walmart and Target

question 57

Multiple Choice

Table 14-2

Table 14-2 shows the payoff matrix for Walmart and Target from every combination of pricing strategies for the popular PlayStation 4. At the start of the game each firm charges a low price and each earns a profit of $7,000.
-Refer to Table 14-2.For each firm, is there a better outcome than the current situation in which each firm charges the low price and earns a profit of $7,000?

• A)Yes, the firms can implicitly collude and agree to charge a higher price.
• B)No, there is no incentive for each firm to consider any other strategy.
• C)No, any other strategy hurts consumers.
• D)Yes, each firm can implicitly agree to increase output and not to deviate from a low price.

---

Definitions:

Sampling Distribution

The probability distribution of a given statistic based on a random sample, used to estimate population parameters.

Formal Charge

Used to calculate the charge of an atom in a molecule, assuming that electrons in all chemical bonds are shared equally between atoms.

Nitrogen

A chemical element with symbol N and atomic number 7, essential for life and a major component of the Earth's atmosphere.

Electron Configuration

The arrangement of electrons within the orbitals of atoms or molecules.