The Following Payoff Matrix Shows the Profits Accruing to Two

question 9

Multiple Choice

The following payoff matrix shows the profits accruing to two firms,Company A and Company B,under different pricing strategies.In each cell,the figure on the left indicates Company A's payoff and the figure on the right indicates Company B's payoff.
Table 15-2
-Refer to Table 15-2.Which of the following is true?

• A)Company A's dominant strategy is to set a high price.
• B)Company A's dominant strategy is to set a medium price.
• C)Company A's dominant strategy is to set a low price.
• D)Company A does not have a dominant strategy.

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Definitions:

Price Floor

A government-imposed minimum price that can be charged for a good or service, intended to prevent prices from dropping too low.

Consumer Surplus

The differentiation between what consumers are prepared to expend on a good or service and the sums they actually do.

Supply Curve

An illustrated chart that demonstrates how the supply quantity relates to a good's price.

Producer Surplus

The discrepancy between what sellers are prepared to accept for a commodity and the real payment they secure from selling it at the prevailing market price.