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:

Debit Memorandum

A document or entry recorded by an entity that decreases a balance in another's account, typically used in adjustments between businesses.

Cash Balance

The amount of cash a company has on hand at a given time, reflecting its liquidity.

Custody

The protective care or guardianship of someone or something, often used in legal contexts to refer to the care of children or assets.

Accounting Records

Documentation and books that comprise a record of all financial transactions of a business, used for tracking its income, expenses, assets, and liabilities.