This Figure Displays the Choices and Payoffs (Company Profits)of Two

question 68

Multiple Choice

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop.MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices,in the hopes that a new business will not be able to make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
Given the dominant strategy of MiiTunes according to the figure,we can predict that The Rock Shop:

• A) will enter and enjoy profits of $4 million.
• B) will enter and lose $2 million.
• C) will not enter and earn $0.
• D) Their actions cannot be predicted because they do not have a dominant strategy.

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Definitions:

Whirling Dervishes

Whirling Dervishes are members of the Sufi tradition of Islam, performing a ceremonial dance known as the Sema, which symbolizes a spiritual journey and the ascent of the soul towards God.

Sufism

A mystical Islamic belief system focused on the inward search for God and shunning materialism.

Hajj

An Islamic pilgrimage to Mecca that is required of all Muslims who are physically and financially able to undertake it at least once in their lifetime.

Islam

A monotheistic religion articulated by the Quran, with Muhammad as the last prophet, emphasizing submission to Allah.