-Oscar and Felix Are the Only Firms That Clean Offices

question 252

Multiple Choice

-Oscar and Felix are the only firms that clean offices in a large city. They agree to operate as a cartel. The payoff matrix above gives the economic profit that each firm can make. If Felix cheats on the agreement but Oscar complies, Felix makes an economic profit of ________ and Oscar makes an economic profit of ________.

• A) $10 million; $10 million
• B) $1 million; $1 million
• C) -$2 million; $12 million
• D) $12 million; -$2 million

---

Definitions:

Decision Strategy

An approach individuals or organizations adopt to make choices among various alternatives, often involving tools and processes to improve outcomes.

Time Constraints

Limitations or restrictions on the duration available to complete a task, project, or objective.

Political Considerations

Factors related to the dynamics, power, and relationships within an organization or between entities that influence decisions and actions.

Limited Information

The situation of having insufficient data or knowledge to make fully informed decisions.