A Dominant Strategy

question 68

Multiple Choice

A dominant strategy

• A)is one that is the best for a firm, no matter what strategies other firms use.
• B)is one that a firm is forced into following by government policy.
• C)involves colluding with rivals to maximise joint profits.
• D)involves deciding what to do after all rivals have chosen their own strategies.

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Definitions:

Market Price

The current value at which a good or service can be bought or sold in a marketplace, determined by the forces of supply and demand.

Perfect Price Discrimination

Perfect price discrimination occurs when a seller charges every consumer the maximum they are willing to pay, capturing the entire consumer surplus as profit.

Marginal Revenue

The additional revenue that a company gains by selling one more unit of a product or service.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping.