Table 17-22 Brian and Matt Own the Only Two Bicycle Repair Shops

question 239

Multiple Choice

Table 17-22
Brian and Matt own the only two bicycle repair shops in town. Each must choose between a low price for repair work and a high price. The annual economic profit from each strategy is indicated in the table. The profits are shown as (Matt, Brian) in each cell.
-Refer to Table 17-22. Which of the following statements is correct if Brian and Matt will play this game only once?

• A)The Nash equilibrium is the high price.
• B)A Nash equilibrium cannot be established unless Brian and Matt collude.
• C)A Nash equilibrium cannot be established without the players repeating the game.
• D)The Nash equilibrium price is the low price.

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Definitions:

Self-Control

The ability to regulate one's emotions, thoughts, and behavior in the face of temptations and impulses.

Mood Swings

Rapid and extreme fluctuations in a person's emotional state.

External Control Orientation

The belief that one's outcomes or fate are determined by external forces beyond one's control.

Initiative

The ability to take the lead and start actions independently without needing encouragement or direction from others.