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

question 49

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.The Nash equilibrium for this game is for:

• A)both firms to sell the product at a low price
• B)both firms to sell the product at a high price
• C)firm A to sell at a low price and for firm B to sell at a high price
• D)firm A to sell at a high price and for firm B to sell at a low price

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Definitions:

Maker

In the context of negotiable instruments, the individual or entity that creates and signs the instrument, promising to pay the specified amount.

Liability

Liability is the legal responsibility to settle debts or legal claims. This encompasses both financial obligations and the duty to compensate for harm or damage caused.

Negotiable Instrument

A document in writing that promises to pay a designated sum of money, either when asked or at a predetermined time, with the document specifying who must make the payment.

Signs

Objects, gestures, or marks used to convey information, instructions, or identifications.