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

question 117

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 with these prices. The Rock Shop is trying to decide whether or not it should enter the market.If MiiTunes and The Rock Shop are faced with the choices outlined in the figure, what outcome can we predict?

• A)MiiTunes will charge high prices and The Rock Shop will not enter the market.
• B)There is more than one stable outcome to this game.
• C)There is no stable outcome to this game.
• D)None of these statements are true.

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Definitions:

Sequences of Rocks

The order and position of layers of rock, indicating their relative ages and the geological history of a region.

North America

A continent entirely within the Northern Hemisphere and almost all within the Western Hemisphere; it is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the east, the Pacific Ocean to the west, and South America and the Caribbean Sea to the southeast.

South Pole

The southernmost point on the Earth's surface, depicted as the point where the Earth's axis of rotation intersects its surface in the Antarctic.

Antarctica

The Earth's southernmost continent, containing the geographic South Pole, noted for its vast ice sheets and extreme cold temperatures.