Table 11-8 Suppose OPEC Has Only Two Producers, Saudi Arabia and Nigeria

question 217

Multiple Choice

Table 11-8
$\begin{array}{c}\text { Saudi Arabia's (S) Choices }\\\text { Nigeria's (N) Choices }\begin{array}{|c|c|c|}\hline &{\text { Low Output }} & \text { High Output } \\\hline \text { Low Output } & \begin{array}{l}\text { S: } \$ 100 \text { million profit } \\\text { N: } \$ 20 \text { million profit }\end{array} & \begin{array}{l}\text { S: } \$ 75 \text { million profit } \\\text { N: } \$ 12 \text { million profit }\end{array} \\\hline \text { High Output } & \begin{array}{l}\text { S: } \$ 80 \text { million profit } \\\text { N: } \$ 30 \text { million profit }\end{array} & \begin{array}{l}\text { S: } \$ 60 \text { million profit } \\\text { N: } \$ 20 \text { million profit }\end{array} \\\hline\end{array}\end{array}$
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 11-8 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 11-8.Is there a dominant strategy for Nigeria and,if so,what is it?

• A)Yes, it has a dominant strategy depending on what Saudi Arabia does.
• B)No, there is no dominant strategy.
• C)Yes, the dominant strategy is to produce a low output.
• D)Yes, the dominant strategy is to produce a high output.

---

Definitions:

Baby Bottle

A container with a nipple to drink directly from, used for feeding babies and young children with milk, formula, or other liquids.

Rattle

A toy designed for infants and toddlers that produces sound when shaken, aiding in sensory development and motor skills.

Personality Disorders

A class of mental disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience, exhibited across many contexts and deviating from those accepted by the individual's culture.

Social Functioning

The ability of an individual to interact and perform effectively in social settings and fulfill societal roles.