-Figure 11-13 Shows the Payoff Matrix for the Only Two

question 113

Multiple Choice

-Figure 11-13 shows the payoff matrix for the only two auto dealerships in a community,Jim's Autos and Tim's Autos.The matrix shows the profits that each firm would earn from choosing either a low price or a high price.In this example,

• A)both firms would be best off if they charged a low price
• B)there is no equilibrium to the market
• C)both firms would be best off if they charged a high price
• D)both firms will go out of business in the long run
• E)the market is more efficient than a perfectly competitive market

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Definitions:

Banned

Prohibited by law or regulation from use, distribution, or production.

Business Entities

Structures established by one or more individuals to conduct business or engage in activities for profit, including corporations, partnerships, and sole proprietorships.

Sole Proprietorship

A business structure owned by a single individual, where there's no legal distinction between the owner and the business.

Liable

Legally responsible or obligated to face consequences, typically in the form of compensations or reparations.