-The Above Figure Shows a Payoff Matrix for Two Firms,A

question 59

Multiple Choice

-The above figure shows a payoff matrix for two firms,A and B,that must choose between a high-price strategy and a low-price strategy.For firm B,

• A) setting a high price is the dominant strategy.
• B) setting a low price is the dominant strategy.
• C) there is no dominant strategy.
• D) doing the opposite of firm A is always the best strategy.

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Definitions:

Commercial Bank Reserves

Funds that commercial banks are required to hold in reserve against deposits, either as cash in their vaults or as deposits with the central bank.

Reserve Ratio

The portion of depositors' balances that banks must have on hand as cash, as required by central banking regulations.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for the loans they take from the central bank or Federal Reserve.

Depository Institutions Deregulation

This involves removing or loosening government restrictions on banks and other financial institutions to allow for greater efficiency and competition.