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Table 17-7 Two Companies, Wonka and Gekko, Each Decide Whether to Produce

question 168

Multiple Choice

Table 17-7
Two companies, Wonka and Gekko, each decide whether to produce a good quality product or a poor quality product. In the figure, the dollar amounts are payoffs and they represent annual profits (in millions of dollars) for the two companies.

-Juan Pablo and Zak are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or not at all. If they both advertise on TV, each will earn a profit of $8,000. If they both advertise on radio, each will earn a profit of $14,000. If neither advertises at all, each will earn a profit of $20,000. If one advertises on TV and other advertises on radio, then the one advertising on TV will earn $12,000 and the other will earn $10,000. If one advertises on TV and the other does not advertise, then the one advertising on TV will earn $22,000 and the other will earn $4,000. If one advertises on radio and the other does not advertise, then the one advertising on radio will earn $24,000 and the other will earn $8,000. If both follow their dominant strategy, then Juan Pablo will

Definitions:

Sensations

Feelings or perceptions resulting from stimulation of the senses, such as touch, taste, smell, sight, and hearing.

Kinesthetic

Relating to kinesthesia, the sense that detects body position, weight, or movement of the muscles, tendons, and joints.

Nonverbal Communication

The process of conveying a message without the use of words, through body language, facial expressions, and other visual cues.

Eye Contact

The act of looking directly into another person's eyes, which can convey a range of emotions and intentions.