Answer the Next Question Based on the Following Payoff Matrix

question 39

Multiple Choice

Answer the next question based on the following payoff matrix for a duopoly.The numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy Refer to the above payoff matrix.If both firms operate independently and do not collude,the most likely profit is:

• A) $400,000 for firm X and $400,000 for firm Y.
• B) $725,000 for firm X and $475,000 for firm Y.
• C) $475,000 for firm X and $725,000 for firm Y.
• D) $625,000 for firm X and $625,000 for firm Y.

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Definitions:

Ethical standard

Ethical standard refers to the principles that guide moral conduct within a profession or organization, outlining acceptable behaviors and practices that ensure fair and just operations.

Corporation

A legal entity that can own property and enter into contracts for the benefit of its shareholders.

Social constitution

The way in which a society is organized, including its social structures, norms, and institutions, and how they interact to shape the behavior and attitudes of its members.

Political economy

A branch of social science that studies the relationships between individuals and society and between markets and the state, using methods from both economics and political science.