The Numbers in Each Cell Are Each Firm's Profits Refer to the Figure Above

question 21

Multiple Choice

The numbers in each cell are each firm's profits. $\begin{array}{c}\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Column Cafe }\\\text { Row Restaurant }\begin{array}{|l|l|l|}\hline & \begin{array}{l}\text { Publish Coupons in } \\\text { Student Paper }\end{array} & \text { No Coupons } \\\hline \text { Publish Coupons in } & \text { Row: 25, } & \text { Row: 200, } \\\text { Student Paper } & \text { Column: 25 } & \text { Column: 10 } \\\hline \text { No Coupons } & \text { Row: 10, } & \text { Row: 120, } \\& \text { Column: 200 } & \text { Column: 120 } \\\hline\end{array}\end{array}$
Refer to the figure above.The payoffs of this game are such that:

• A) if Row Restaurant expects that Column Cafe will choose its dominant strategy,Row should choose to not follow its own dominant strategy.
• B) profits at both firms would be highest if both firms follow their dominant strategies.
• C) both firms would benefit from a law that made publishing coupons illegal.
• D) an agreement to not publish coupons would be stable because with these profits neither firm has an incentive to defect.

---

Definitions:

Serious Interest

A genuine and substantial consideration or enthusiasm towards a specific subject or proposal.

Application Forms

Documents designed to gather essential information from applicants, typically used for employment or educational admissions.

Recommended Guidelines

Suggested procedures or standards advised for achieving best practices or compliance in a specific area.

Disregard

The act of paying no attention or showing indifference to something or someone.