Table 12.3 Suppose OPEC Has Only Two Producers, Saudi Arabia and Nigeria

question 66

Multiple Choice

Table 12.3

Suppose OPEC has only two producers, Saudi Arabia and Nigeria. Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria. The payoff matrix in Table 12.3 shows the profits earned per day by each country. "Low output" corresponds to producing the OPEC assigned quota and "high output" corresponds to producing the maximum capacity beyond the assigned quota.
-Refer to Table 12.3.Which of the following statements is true?

• A)The Nash equilibrium is a noncooperative, dominant strategy equilibrium.
• B)The Nash equilibrium is a cooperative equilibrium.
• C)The Nash equilibrium is a collusive equilibrium.
• D)There is no Nash equilibrium in this game because each party pursues its dominant strategy.

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Definitions:

Market Segmentation

The process of dividing a target market into smaller, more defined categories.

Shared Characteristics

Traits or features that are common among a particular group of people, items, or phenomena.

Market Segments

Distinct groups of potential consumers sorted by specific characteristics or behaviors, targeted with tailored marketing strategies.

Segmentation Process

The Segmentation Process is the method of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors, who might require separate products or marketing mixes.