Figure 17-2

question 167

Multiple Choice

Figure 17-2.John and Michael are roommates.On a particular day,their apartment needs to be cleaned.Each person has to decide whether to take part in cleaning.At the end of the day,either the apartment will be completely clean (if one or both roommates take part in cleaning) ,or it will remain dirty (if neither roommate cleans) .With happiness measured on a scale of 1 (very unhappy) to 10 (very happy) ,the possible outcomes are as follows:
-Refer to Figure 17-2.The possible outcome in which both John and Michael clean is analogous to which of the following outcomes of the duopoly game?

• A) The duopolists collude to achieve the monopoly outcome.
• B) The duopolists collude to achieve the monopolistically-competitive outcome.
• C) The outcome is the one that is most preferable for consumers of the duopolists' product.
• D) The outcome is the one that is least preferable for both the duopolists and for the consumers of their product.

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Definitions:

ZOPA

The zone of possible agreement, the area where two sides in a negotiation may find common ground.

BATNA

Stands for Best Alternative To a Negotiated Agreement, which refers to the most advantageous alternative course of action a party can take if negotiations fail and an agreement cannot be reached.

Legally Binding

Agreements or contracts that are enforceable by law, obliging parties to fulfill their agreed-upon terms under legal jurisdiction.

ZOPA

Stands for Zone of Possible Agreement, which is the range in a negotiation within which an agreement is satisfactory to both parties involved.