Use the Following Case from Question

question 81

Multiple Choice

Use the following case from question
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
-​In a sequential game,if Irene decides to enter the market,what would be Mattie's best response?

• A)​Accommodate
• B)Fight
• C)Run away
• D)​Shut down

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Definitions:

Resource Misallocation

The inefficient distribution or use of resources in an economy, leading to suboptimal outcomes in production and consumption.

Public Policy

Government actions, including laws, regulatory measures, and funding priorities, designed to address issues viewed as important by the public.

Agriculture

The practice and science of cultivating the soil, growing crops, and raising livestock to produce food, fiber, medicinal plants, and other products.

Parity Ratio

A measure used in agriculture to compare the relative purchasing power of income from farming to a base period.