Table 14-3 Suppose OPEC Has Only Two Producers, Saudi Arabia and Nigeria.Saudi

question 198

Multiple Choice

Table 14-3

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 14-3 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 14-3.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.

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Definitions:

Private Bargaining

Private bargaining refers to the negotiation process between individuals or private entities without external intervention, aimed at reaching mutual agreements or resolving disputes.

Laissez-faire Style

A leadership or management style characterized by minimal direct supervision, allowing employees significant autonomy in their day-to-day operations.

Task

A specific assignment or piece of work to be done, usually as part of broader duties or projects.

Group Decisions

Decisions made collectively by a group of individuals rather than an isolated individual, often through a process of discussion and consensus.