Joe Is the Owner of the 7-11 Mini Mart,Sam Is

question 19

Multiple Choice

Joe is the owner of the 7-11 Mini Mart,Sam is the owner of the SuperAmerica Mini Mart and together they are the only gas stations in town.At the current price of $3 per gallon,both receive total revenues of $1,000.Joe is considering cutting his price to $2.90,which would increase his total revenue to $1,350 if Sam continues to charge $3.If Sam's price remains $3 after Joe cuts his price,Sam will collect $500 in revenues.If Sam cuts his price to $2.90,his total revenues would also rise to $1,350 if Joe continues to charge $3.Joe will collect $500 in revenues if he keeps his price at $3 while Sam lowers his to $2.90.Joe and Sam will receive $900 each in total revenue if they both lower their price to $2.90.You may find it easier to answer the following question if you fill in the payoff matrix below. $\begin{array}{c}\quad\quad\quad\quad\quad\quad\quad\text { Joe }\\\text { Sam }\begin{array}{|l|c|c|}\hline &\begin{array}{c}\text { Cut } \\\text { Price }\end{array} & \begin{array}{c}\text { Keep Old } \\\text { Price }\end{array} \\\hline \text { Cut } \\\text { Price } \\\hline \text { Keep Old } \\\text { Price } \\\hline\end{array}\end{array}$
Refer to the information given above.If both players choose their dominated strategy they will each earn _____ and if both players choose their dominant strategy they will each earn _____.

• A) $500;$1350
• B) $900;$1350
• C) $900;$1000
• D) $1000;$900

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Definitions:

Organizational Resources

The assets, capabilities, processes, and information that a company uses to improve its effectiveness and achieve its objectives.

Executive Compensation

The package of pay, benefits, and incentives provided to an organization's senior management, designed to attract and retain key executives.

Leaders

Individuals who guide or influence a group towards achieving goals through inspiration and direction.