Use the Following to Answer Questions

question 233

Multiple Choice

Use the following to answer questions:
Figure: Pricing Strategy in Cable TV Market II
-(Figure: Pricing Strategy in Cable TV Market II) Look at the figure Pricing Strategy in Cable TV Market II. Suppose that after one month, the cable providers follow a tit-for-tat strategy. Eventually they will achieve a tacit collusive equilibrium at which:

• A) both firms set a low price and each earns $90,000 per month.
• B) both firms set a high price and each earns $100,000 per month.
• C) CableNorth sets a high price and earns $80,000 per month and CableSouth sets a low price and earns $130,000 per month.
• D) CableNorth sets a low price and earns $130,000 per month and CableSouth sets a high price and earns $80,000 per month.

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Definitions:

Formal Forms

Structured, officially recognized or institutionalized patterns, shapes, or arrangements that adhere to established rules or standards.

Moral Panic

A widespread feeling of fear, often irrational, that some evil threatens the well-being of society, typically provoked by media coverage and leading to public calls for action.

Death Penalty

A legal punishment where a person is put to death by the state as a consequence for a crime deemed as particularly severe.

Gender Equality

The state in which access to rights or opportunities is unaffected by gender, allowing individuals of all genders to participate and benefit equally in all aspects of society.