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

question 170

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.The Nash-equilibrium in this market is:

• A)firm A gets $500, firm B gets $500
• B)firm A gets $300, firm B gets $600
• C)firm A gets $600, firm B gets $300
• D)firm A gets $400, firm B gets $400

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Definitions:

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The rights of citizens to political and social freedom and equality, often protected by law against discrimination or oppression.

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A feeling or belief that one has little to no control over the events in their life, often perceived as a widespread or all-encompassing sensation.