Refer to the Profits-Payoff Table for a Duopoly

question 263

Multiple Choice

Refer to the profits-payoff table for a duopoly. Which of the following statements is true about Nash equilibrium in this game?

• A)A Nash equilibrium exists where X charges $7 and Y charges $5, because that is the cell that maximizes the combined profits of the two firms.
• B)There are multiple Nash equilibriums in this game.
• C)There is no Nash equilibrium in this game.
• D)Nash equilibriums occur in this game only where the two firms are charging the same price.

---

Definitions:

Shrimp Market

A specific sector within the food industry focusing on the buying, selling, and distribution of shrimp.

Price Ceiling

A legal limit set by the government on how high the price of a good or service can be charged in the market.

Shrimp Sales

The commercial activity of selling shrimp, a popular seafood, either cultivated or wild-caught, in various markets.

Binding Price Floor

A government-imposed price control set above the equilibrium price, causing a surplus by preventing the price from falling to its natural level.