The Following Table Shows Two Firms in a Duopoly

question 142

Multiple Choice

The following table shows two firms in a duopoly.Each firm makes its decision without knowledge of the other firm's decision.The payoffs for each firm represent economic profits,and each firm strictly prefers more economic profit than less.In this game,selling ________ subscriptions a month is a dominant strategy for Flixbuster and selling ________ subscriptions a month is a dominant strategy for Nextflix.

• A) 200; 200
• B) 200; 400
• C) 400; 200
• D) 400; 400
• E) 100; 100

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Definitions:

Price Range

The spread between the highest and lowest selling price of a good or service in a market over a certain period of time.

Total Revenues

The total amount of money generated by a firm from its sales activities before any expenses are subtracted.

Elastic

A description of a variable's sensitivity to change in another variable, often used in economics to describe how demand or supply responds to changes in price.

Price-elasticity Coefficient

A measure that calculates how much the quantity demanded of a good responds to a change in its price, quantitatively.