Displayed Below Is the Payoff Matrix of Firm B for Four

question 34

Multiple Choice

Displayed below is the payoff matrix of firm B for four different strategies, B1, B2, B3, and B4, and the potential retaliatory responses of firm A (A1, A2, A3, A4) . Table 12-2
$\begin{array}{lrrrr}& \underline{ B 1 } & \underline{ B2 } & \underline{ B3 } & \underline{ B4 } \\\mathrm{~A} 1 & 100 & 50 & 25 & 200 \\\mathrm{~A} 2 & 10 & 60 & 150 & 150 \\\mathrm{~A} 3 & 50 & 75 & 200 & 75 \\\mathrm{~A} 4 & 70 & 90 & 250 & 15\end{array}$
If firm B uses the maximin criterion, which strategy will it choose?

• A)B1
• B)B2
• C)B3
• D)B4

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Definitions:

Ethics

A branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong behavior.

Maximizing Wealth

The process or strategy aimed at increasing the financial value and assets owned by an individual or corporation.

External Users

Individuals or entities outside of a company who rely on financial statements to make informed decisions about the company, including investors, creditors, and regulatory agencies.

Shareholders

Shareholders are individuals or entities that legally own one or more shares of stock in a public or private corporation, giving them a claim on its assets and earnings.