Table 16-2 In the Following Duopoly Game, the Two Firms Can Either

question 6

Multiple Choice

Table 16-2
In the following duopoly game, the two firms can either set the price of their product high or low. If one firm's price is lower than the other, most of the market will buy from them. This will increase the low-price firm's profit at the expense of the other firm. The game is represented in the table below.

-Refer to Table 16-2. What is the profit firm B will earn if it plays its dominant strategy:

• A) $1000 if firm B has a high price and $1500 if firm B has a low price
• B) $1000 if firm B has a high price and $800 if firm B has a low price
• C) $800 if firm B has a high price and $1250 if firm B has a low price
• D) $800 if firm B has a high price and $1500 if firm B has a low price

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Definitions:

Effectiveness

The degree to which objectives are achieved and targeted results are fulfilled within an organization or system, often used as an indicator of success.

Organizational

Relating to the structure or functioning of an organization, including its systems, policies, and procedures.

Diverse Team

A group composed of members with varying backgrounds, skills, perspectives, and identities, which can enhance creativity and innovation.

Homogeneous Team

A team comprised of members with similar backgrounds, skills, and perspectives, often leading to uniformity in decision-making and problem-solving approaches.