Refer to the Above Payoff Matrix for the Profits (In

question 295

Multiple Choice

Refer to the above payoff matrix for the profits (in $ millions) of two firms (A and

• A) Both firm A and firm B choose the high price.
• B) Both firm A and firm B choose the low price.
• B) and two pricing strategies (high and low). Which of the following is the outcome of the dominant strategy without cooperation?
• C) Firm A chooses the low price while firm B chooses the high price.
• D) Firm A chooses the high price while firm B chooses the low price.

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Definitions:

Substitute Goods

Goods or services that serve as alternatives to each other, where a rise in the cost of one results in a higher demand for the other.

Complementary Goods

Products or services that are used together, where the increase in demand for one leads to an increase in demand for the other.

Natural Gas

A fossil fuel composed mostly of methane, used as a source of energy for heating, cooking, and electricity generation, as well as a feedstock for chemical manufacturing.

Complementary Goods

Goods or services that are frequently utilized in conjunction with each other, leading to a scenario where the desire for one boosts the desire for the other.