Table 11-13 Two Rival Oligopolists in the Coffee Industry, Wide

question 281

Multiple Choice

Table 11-13
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 11-13 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts.
-Refer to Table 11-13.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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