Refer to the Normal-Form Game of Price Competition in the Payoff

question 13

Multiple Choice

Refer to the normal-form game of price competition in the payoff matrix below. $\begin{array}{c}\text { Firm B }\\\text { Firm A}\begin{array}{|l|l|l|} \hline & \text { Low Price } & \text { High Price } \\\hline & & \\\text { Low Price } & 0,0 & 50,-10 \\\hline & & \\\text { High Price } & -10,50 & 20,20\\\hline\end{array}\end{array}$ Suppose that firm A deviates from a trigger strategy to support a high price.What is the present value of A's payoff from cheating?

• A) 70
• B) 50
• C) 30
• D) 20

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Definitions:

Three Terms

In logic, particularly syllogistic reasoning, the use of three different terms to construct a conclusion derived from two premises.

Categorical Syllogism

A form of deductive reasoning consisting of three parts: two premises and a conclusion, where all statements are categorical propositions.

Conclusion

The end or finish of an event, process, or text; in logic, it is the statement that necessarily follows from the premises of an argument.

Categorical Syllogism

A form of deductive reasoning consisting of three propositions: a major premise, a minor premise, and a conclusion, each of which states a relationship between categories.