If Nike and Adidas Are Faced with the Game in the Figure

question 46

Multiple Choice

If Nike and adidas are faced with the game in the figure shown, we can see that:

• A)Nike has a dominant strategy, but adidas does not.
• B)adidas has a dominant strategy, but Nike does not.
• C)Neither company has a dominant strategy.
• D)Both companies have a dominant strategy.

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Definitions:

Price Elasticity

The extent to which the amount of a good that is sought after moves due to a difference in price.

Price Reduction

A decrease in the amount charged for a good or service, often used as a sales strategy to increase demand or respond to excess supply.

Demand Elastic

The responsiveness of the quantity demanded of a good or service to a change in its price; higher elasticity means consumers are more sensitive to price changes.

Price Elastic

A term describing how responsive the demand for a good is to a change in its price.