If My Competitor Maintains Price, I Can Increase My Profit

question 8

Multiple Choice

If my competitor maintains price, I can increase my profit by cutting price. If my competitor cuts price, I can also increase my profit by cutting price. Use the terminology of game theory to describe the strategy of maintaining price.

• A) Dominating strategy.
• B) Dominated strategy.
• C) Nash equilibrium strategy.
• D) Randomized strategy.

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Definitions:

Inches

A unit of length measurement in the Imperial and United States customary systems, equivalent to 1/12th of a foot or 2.54 centimeters.

Hypotenuse

The side opposite the right angle in a right-angled triangle, which is also its longest side.

Adjacent Side

In a right-angled triangle, the side that is next to the angle of interest and forms one side of that angle.

Opposite Side

Typically refers to the side that is diametrically opposed to a referenced side or point, often used in geometrical contexts or discussions of relative positions.