Table 16-2
in the Following Duopoly Game, the Two Firms

question 34

Multiple Choice

Table 16-2
In the following duopoly game, the two firms can either set the price of their product high or low.The game is represented in the table below. $\begin{array}{|c|c|c|c|}\hline&&\text { Firm B }\\&&\text { High Price }&\text { Low Price }\\\hline \text { Firm A }&\text { High Price }&\text { Firm A gets \$1000 } & \text { Firm A get \$1250 } \\&& \text { Firm B gets \$1000 } & \text { Firm B gets \$1100 } \\\hline &\text { Low Price }&\text { Firm A gets \$800 } & \text { Firm A gets \$900 } \\&&\text { Firm B gets \$800 } & \text { Firm B gets \$900 } \\\hline\end{array}$
-Refer to Table 16-2.What is the profit firm B will earn if it plays its dominant strategy:

• A)$1000 if firm A has a high price and $800 if firm A has a low price
• B)$1100 if firm A has a high price and $900 if firm A has a low price
• C)$800 if firm A has a high price and $900 if firm A has a low price
• D)$1250 if firm A has a high price and $1100 if firm A has a low price

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