Exhibit 9-6 Two-Firm Payoff Matrix

question 7

Multiple Choice

Exhibit 9-6 Two-Firm Payoff Matrix

Assume costs are identical for the two firms in Exhibit 9-6. If both firms were allowed to form a cartel and agree on their prices, equilibrium would be established by:

• A) Widget Co. charging the low price and Ajax Co. charging the high price.
• B) Widget Co. charging the high price and Ajax Co. charging the low price.
• C) Widget Co. charging the low price and Ajax Co. charging the low price.
• D) Widget Co. charging the high price and Ajax Co. charging the high price.

---

Definitions:

Respiratory System

The system of organs responsible for taking in oxygen and expelling carbon dioxide in living organisms.

Thrombophlebitis

Inflammation of a vein accompanied by the formation of blood clots within the vein.

Cardiovascular System

The body system comprising the heart and blood vessels, responsible for circulating blood and transporting nutrients and oxygen throughout the body.

Gynecology

A branch of medicine focusing on the health of the female reproductive systems and the breasts.