Refer to the Above Payoff Matrix for the Profits (In

question 115

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 low price.
• B) Both firm A and firm B choose the high 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:

Flow Time

The total time it takes for a product to move through a production process, from start to finish.

Economies of Scale

Cost advantages obtained due to increased production scale, where the cost per unit of production decreases with larger volume.

Cycle Inventory

The inventory a company needs to meet its average sales demand between the arrival of stock replenishments.

Total Cost

The complete cost of production or providing a service, including fixed and variable costs.