Table 16-4 In the Following Duopoly Game, the Two Firms Can Either

question 106

Multiple Choice

Table 16-4
In the following duopoly game, the two firms can either set the price of their product high or low. In this market, customers are very price sensitive: when one firm sets a low price it steals the majority of customers from its competitor. The game is represented in the table below.

-Refer to Table 16-4. The Nash-equilibrium in this market is:

• A) firm A gets $500, firm B gets $500
• B) firm A gets $300, firm B gets $600
• C) firm A gets $600, firm B gets $300
• D) firm A gets $400, firm B gets $400

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Definitions:

Implicit Premise

An unstated assumption that supports the logical structure of an argument.

Opponent's Argument

The viewpoint or stance presented by someone opposed to a particular position or argument.

Implicit Premises

Unstated assumptions or beliefs that logically underpin an argument or reasoning process but are not explicitly mentioned.

Diagram

A simplified drawing or plan that represents data, processes, or systems, often used for illustration or problem-solving purposes.