​Use the Following to Answer Question

question 82

Multiple Choice

​Use the following to answer question
Consider the following information for a simultaneous move game:  If you charge a low price (LP) and your rival charges a LP,you each earn $5 million in profits.  If both charge a high price (HP) ,each will each earn $10 million in profits.  However,if one charge a LP and the other does not,the firm that charges a LP will earn $15 million and the other firm will earn $1 million.
-​If the game continues for infinity,then the new Nash Equilibrium is

• A)​for one firm to charge a HP forever.
• B)for your firm charge a LP when the other firm does.
• C)for each firm to charge HP so long as the rival does,otherwise charge a LP.
• D)​for each firm to charge LP until the rival does,and then to charge a HP forever.

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Definitions:

Ducklings

Ducklings are the young of ducks; in psychology, they are often used in imprinting studies, which show how they can form attachments during a critical period early in life.

Blisspoint

The free operant level of two responses.

Set Point

A set point in physiological and psychological contexts refers to a theoretical value that the body or mind aims to maintain through various regulatory mechanisms, such as body temperature or weight.

Operant Level

The baseline rate of a behavior before conditioning or reinforcement is applied.