Table 17-19 Consider a Small Town That Has Two Grocery Stores from Stores

question 428

Multiple Choice

Table 17-19
Consider a small town that has two grocery stores from which residents can choose to buy a loaf of bread. The store owners each must make a decision to set a high bread price or a low bread price. The payoff table, showing profit per week, is provided below. The profit in each cell is shown as (Store 1, Store 2) .
-Refer to Table 17-19. What is the Nash Equilibrium of this price-setting game?

• A)Grocery store 1: Low price Grocery store 2: Low price
• B)Grocery store 1: Low price Grocery store 2: High price
• C)Grocery store 1: High price Grocery store 2: How price
• D)Grocery store 1: High price Grocery store 2: High price

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Definitions:

Profit Centers

Profit centers are segments, branches, or divisions of a company that are treated as a separate business, responsible for generating their own revenues and profits.

Corporate Headquarters

The main office or center of operations for a business where significant managerial and administrative work is conducted.

Company-wide Profits

The total earnings of a company after all expenses have been subtracted from revenues, reflecting the overall financial success across all departments.

Profit Centers

Parts of an organization that are treated as separate business units, with their expenses and revenues, to calculate their individual profitability.