Table 16-4
in the Following Duopoly Game, the Two Firms

question 167

Multiple Choice

Table 16-4
In the following duopoly game, the two firms can either set the price of their product high or low.In this market, customers are very price sensitive: when one firm sets a low price it steals the majority of customers from its competitor.The game is represented in the table below. $\begin{array}{|c|c|c|c|}\hline&&\text { Firm B }\\&&\text { High Price }&\text { Low Price }\\\hline \text { Firm A }&\text { High Price }&\text { Firm A gets \$500 } & \text { Firm A get \$300 } \\&& \text { Firm B gets \$500 } & \text { Firm B gets \$600 } \\\hline &\text { Low Price }&\text { Firm A gets \$600 } & \text { Firm A gets \$400 } \\&&\text { Firm B gets \$300 } & \text { Firm B gets \$400 } \\\hline\end{array}$
-Refer to table 16-4.Profit for each firm would be maximised if:

• A)each firm plays their dominant strategy
• B)firm A sets a high price and firm B sets a low price
• C)firm A sets a low price and firm B sets a high price
• D)the two firms could successfully collude

Understand and calculate budgeted cost of goods sold.

Identify and describe different components of a merchandise purchases budget.

Calculate budgeted material needs and understand raw material inventory management.

Calculate budgeted purchases based on sales and inventory requirements.

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Definitions:

Naturalistic Observation

A research method where subjects are observed in their natural environment without any manipulation by the researcher.

Replication

The process of repeating a study or experiment to verify its results.

Random Samples

A subset of a population chosen in such a way that every member has an equal chance of being selected, ensuring unbiased representation.

Research Participants

individuals who take part in scientific studies, providing data for researchers to analyze and draw conclusions.