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

question 111

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.
If the two music stores are faced with the game in the figure,we can see that:

• A) The Rock Shop has a dominant strategy, but MiiTunes does not.
• B) MiiTunes has a dominant strategy, but The Rock Shop does not.
• C) neither store has a dominant strategy.
• D) both stores have a dominant strategy.

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Definitions:

Recessionary Period

A time characterized by a significant decline in economic activity across the economy, lasting more than a few months.

Voluntarily Switching Jobs

The act of an employee choosing to leave one job for another, often for better pay, benefits, or working conditions.

Seasonal Unemployment

Unemployment caused by seasonal changes in the demand for certain kinds of labor.

Official Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment, as calculated by government statistics.