Use the Following to Answer Questions

question 234

Multiple Choice

Use the following to answer questions:
Scenario: Payoff Matrix for Firms X and Y
The following payoff matrix depicts the profits for the only two firms in this oligopolistic industry.
-(Scenario: Payoff Matrix for Firms X and Y) In the scenario Payoff Matrix for Firms X and Y, if firm X were to choose its dominant strategy, it would:

• A) choose a low price.
• B) choose a high price.
• C) encounter a dilemma, since there are two dominant strategies.
• D) allow firm Y to dominate the industry.

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Definitions:

Economically Inefficient Outcomes

Situations where resources are not allocated optimally, resulting in lost potential utility or value.

Economists

Professionals who study the production, distribution, and consumption of goods and services.

Deregulation

The reduction or elimination of government power in a particular industry, usually with the aim of creating more competition within the industry.

Monopoly

A market structure characterized by a single seller who has exclusive control over the supply and pricing of a unique product or service.