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

question 184

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 Zuma selects a high price,what is Wide Awake's best strategy and what will Wide Awake earn as a result of this strategy?

• A) Wide Awake will select a low price and earn $2 million.
• B) Wide Awake will select a low price and earn $4 million.
• C) Wide Awake will select a high price and earn $3 million.
• D) Wide Awake will select a high price and earn $4 million.

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