-Oscar and Felix Are the Only Firms That Clean Offices

question 235

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 shows the economic profit that each firm can make. If the game is played only once, then

• A) Felix and Oscar will each make $10 million economic profit.
• B) Felix will comply and Oscar will make $12 million economic profit.
• C) Felix and Oscar will each make $1 million economic profit.
• D) Felix will cheat and Oscar will make -$2 million economic profit.

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