-The Above Figure Shows the Payoff Matrix for Two Firms,A

question 70

Multiple Choice

-The above figure shows the payoff matrix for two firms,A and B,choosing to produce a basic computer or an advanced computer.The mixed-strategy Nash equilibrium is

• A)Firm A produces an advanced computer with 80% chance,firm B produces an advanced computer with 20% chance.
• B)Both firms produce advanced computers with 50% chance.
• C)Firm A produces an advanced computer with 60% chance,firm B produces an advanced computer with 40% chance.
• D)Both firms produce advanced computer with 80% chance.

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Definitions:

Quoted Loan Rates

The interest rates that banks or other lenders advertise as available to borrowers.

Competitive

Characterized by the existence of competition; striving to gain or win something by defeating or establishing superiority over others.

Compounded Continuously

The mathematical limit that investment interest can grow to when it is compounded infinitesimally.

Borrowing Money

The act of obtaining funds from another party, often a financial institution, under the agreement to pay back with interest.