The Table Below Shows How the Payoffs to Two Political

question 37

Multiple Choice

The table below shows how the payoffs to two political candidates depend on whether the candidates run a positive or negative campaign. The payoffs are given in terms of the percentage change in the number of votes received.  
Suppose that the Republican candidate tells the Democratic candidate that he intends to run a positive campaign. The likely result is that:

• A)both candidates will run a positive campaign.
• B)the Republican candidate will run a positive campaign, and the Democratic candidate will run a negative campaign.
• C)both candidates will run a negative campaign.
• D)the Republican candidate will run a negative campaign, and the Democratic candidate will run a positive campaign.

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Definitions:

Marginal Cost

Marginal Cost is the additional cost incurred from producing one more unit of a good or service, an important concept in economics for decision-making regarding production levels.

Deadweight Loss

describes a loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is distorted by external factors like taxes or subsidies.

Demand Curve

represents the relationship between the price of a good and the quantity of that good consumers are willing to purchase.

Monopoly Power

Monopoly Power describes the ability of a company or entity to control the price and supply of a product or service, due to the lack of significant competition.