Answer the Question Based on the Payoff Matrix for a Duopoly

question 55

Multiple Choice

Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm. If the two firms collude to maximize joint profits,

• A)there will be an incentive for Firm A to cheat and earn more if Firm B does not switch strategies.
• B)there will be an incentive for Firm B to cheat and earn more if Firm A does not switch strategies.
• C)there will be no incentive for either Firm A or Firm B to cheat.
• D)there will be incentives for both Firm A and Firm B to cheat.

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