Table 14-8 Two Rival Oligopolists in the Coffee Industry, Wide Awake and Coffee

question 9

Multiple Choice

Table 14-8

Two rival oligopolists in the coffee industry, Wide Awake and Zuma, have to decide on their pricing strategy. Each can choose either a high price or a low price. Table 14-8 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts.
-Refer to Table 14-8.If the firms act out of individual self-interest, which prices will they select?

• A)Both firms will select a high price.
• B)Zuma will select a high price and Wide Awake will select a low price.
• C)Zuma will select a low price and Wide Awake will select a high price.
• D)Both firms will select a low price.

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Definitions:

Legitimate Stakeholders

Individuals or groups that have a valid or legally recognized interest or claim in a project, business or company.

Proper

Suitable or appropriate to the circumstances; conforming to the accepted standard or rules.

Desired

A state of wanting or wishing for something with the expectation or hope of achieving it.

Demanding Stakeholders

Stakeholders with high expectations or requirements from a project, company, or initiative.