Refer to the Diagram, Where the Numerical Data Show Profits

question 283

Multiple Choice

Refer to the diagram, where the numerical data show profits in millions of dollars. Beta's profits are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. Which cell represents a Nash equilibrium?

• A)The two firms will be maximizing joint profits.
• B)Y would find it advantageous to raise its price if it were certain X would not alter its price.
• C)X would find it advantageous to raise its price if it were certain Y would not alter its price.
• D)both firms would find it advantageous to collude to raise their prices by $1 each.

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