Use the Table Below to Answer the Following Questions

question 65

Multiple Choice

Use the table below to answer the following questions.
Table 15.2.2

-Table 15.2.2 gives the payoff matrix in terms of economic profit for firms A and B when there are two strategies facing each firm: (1) charge a low price, or (2) charge a high price. The equilibrium in this game (played once) will be a dominant strategy equilibrium because

• A)firm B will reduce profit by more than A if both charge a lower price.
• B)firm B is the dominant firm.
• C)the best strategy for each firm does not depend on the strategy chosen by the other firm.
• D)there is no credible threat by either firm to "punish" the other if it breaks the agreement.
• E)each firm will charge the higher price.