Answer the Question Based on the Payoff Matrix for a Duopoly

question 241

Multiple Choice

Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. If both firms operate independently and actively compete with each other, the most likely profit is

• A)$400,000 for firm X and $400,000 for firm Y.
• B)$725,000 for firm X and $475,000 for firm Y.
• C)$475,000 for firm X and $725,000 for firm Y.
• D)$625,000 for firm X and $625,000 for firm Y.

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Definitions:

Similar Interests

Shared goals, hobbies, or concerns among individuals or groups that facilitate common ground or bonding.

Magnitude of Consequences

The scale or impact of the outcomes resulting from an action or decision.

Ethical Decision

A choice made based on moral principles and values, considering the rightness or wrongness of the action and its consequences.

Benefits

Advantages or positive outcomes that are derived from a particular action or set of actions.