The Figure Shown Represents the Choices and Payoffs (Company Profits)of

question 109

Multiple Choice

The figure shown represents the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to compete at these prices. The Rock Shop is trying to decide whether or not it should enter the market.If MiiTunes chooses its dominant strategy, we can predict that The Rock Shop:

• A)will enter the market and will earn $4 million.
• B)will enter the market and will lose $2 million.
• C)will not enter the market and will earn $0.
• D)The Rock Shop's decision cannot be predicted because it does not have a dominant strategy.

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Definitions:

Notice of Dishonor

A formal notification indicating that a negotiable instrument like a check or bill of exchange has been presented for payment and declined.

Endorser

One who issues an endorsement.

Unauthorized Signature

A signature made on a document by someone who doesn't have the legal authority or permission to sign it.

Negligence

Negligence is the failure to take proper care in doing something, leading to damage or injury to another person.