Suppose Firm a and Firm B Are Considering Whether to Invest

question 45

Multiple Choice

Suppose Firm A and Firm B are considering whether to invest in a new production technology. For each firm, the payoff to investing (given in thousands of dollars per day) depends upon whether the other firm invests, as shown in the payoff matrix below. Which of the following statements is correct?

• A) It cannot be determined whether Firm A has a dominated strategy.
• B) "Don't invest" is a dominated strategy for Firm A.
• C) Firm A does not have a dominated strategy.
• D) "Invest" is a dominated strategy for Firm A.

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Definitions:

Threatening Manner

Behavior or gestures that imply danger or the intention to cause harm.

Anti-Gay Prejudice

Hostility or negative attitudes towards individuals based on their perceived or actual homosexual orientation.

Biased Culture

A societal or group tendency to favor certain perspectives, values, or beliefs, often leading to unfair treatment or discrimination against others.

Homophobia

Prejudice, aversion, or discrimination against individuals who are homosexual or perceived to be homosexual.