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 MiiTunes and The Rock Shop are both in the music business and faced with the choices outlined in the figure shown,we can predict the outcome will be that:
Definitions:
Crude Oil
An unrefined, naturally sourced petroleum compound made of hydrocarbon collections and different organic elements.
Comparative Advantage
The ability of an individual or group to produce a good or service at a lower opportunity cost than another.
Tractors
Vehicles specially designed to deliver high torque at low speeds, used mainly in the farming industry for agricultural purposes.
Crude Oil
A crude, naturally existing petroleum substance comprising hydrocarbon deposits and miscellaneous organic materials.
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