Table 14-8 Two Rival Oligopolists in the Athletic Supplements Industry, the Power

question 195

Multiple Choice

Table 14-8

Two rival oligopolists in the athletic supplements industry, the Power Fuel Company and the Brawny Juice Company, 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)Brawny Juice will select a high price, Power Fuel will select a low price.
• C)Brawny Juice will select a low price, Power Fuel will select a high price.
• D)Both firms will select a low price.

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Definitions:

Preconscious

The part of the mind containing thoughts and feelings that are not currently in conscious awareness but can be easily accessed.

Psychosexual Stages

A Freudian theory describing five stages of child development, each centered on sexual pleasure from different body areas.

Phallic

Referring to or characterized by the third stage of psychosexual development in Freudian theory, focusing on the genital organs as the primary source of pleasure.

Latency

In psychoanalytic theory, a period of childhood development characterized by the sublimation of instinctual drives; it is considered a phase of relative psychological calm.