A Dominant Strategy Is

question 254

Multiple Choice

A dominant strategy is

• A)an equilibrium where each firm chooses the best strategy, given the strategies of other firms.
• B)a strategy chosen by two firms that decide to charge the same price or otherwise not to compete.
• C)a strategy that is obviously the best for each firm that is a party to a business decision.
• D)a strategy that is the best for a firm no matter what strategies other firms use.

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Definitions:

Payback Period

The time it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment.

Salvage Value

The estimated resale value of an asset at the end of its useful life.

Internal Rate

This term is ambiguous without further context. It might refer to Internal Rate of Return (IRR), which is a method of calculating an investment's rate of return.

Cash Flows

The movement of money into and out of a business, project, or financial product.