What Is a Dominant Strategy

question 5

Multiple Choice

What is a dominant strategy?

• A)An equilibrium where each firm chooses the best strategy, given the strategies of other firms.
• B)A strategy chosen by two firms that decide to charge the same price or otherwise not to compete.
• C)A strategy that is obviously the best for each firm that is a party to a business decision.
• D)A strategy that is the best for a firm no matter what strategies other firms use.

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Definitions:

Trustbusters

Refers to government officials or policies that aim to break up or regulate monopolies and ensure competition in the marketplace.

FTC Act

Legislation established to prevent unfair competition, deceptive acts, and regulate antitrust.

Sherman Act

A landmark federal statute in the field of United States antitrust law passed by Congress in 1890 to preserve competitive market conditions by prohibiting monopolies, cartels, and trusts.

Vertical Mergers

The combination of two or more companies that operate at different stages of production in the same industry, such as a manufacturer merging with a supplier.