The Following Provides Information for a One-Shot Game What Are the Dominant Strategies for Firm a and Firm

question 130

Multiple Choice

The following provides information for a one-shot game. $\begin{array}{l}\quad\quad\quad\quad\quad\quad\text { Firm B}\\\text { Firm A}\begin{array}{|l|l|l|} \hline &\text { Low Price } & \text { High Price }\\\hline & & \\\text { Low Price } & (2,2) & (10,-8) \\\hline & & \\\text { High Price } & (-8,10) & (15,15) \\\hline\end{array}\end{array}$ What are the dominant strategies for firm A and firm B respectively?

• A) (low price, high price)
• B) (high price, low price)
• C) (high price, high price)
• D) Neither firm has a dominant strategy.

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Definitions:

Entry Restrictions

Regulations or barriers that prevent new competitors from easily entering an industry or area of business.

Revenue Function

A mathematical relationship describing how a firm’s total revenue changes with variations in output or sales.

Total Profits

The entirety of financial gains earned by a business after subtracting all costs and expenses from total revenues.

Advertising Costs

Costs associated with marketing a product, service, or brand to prospective buyers.