The Table Given Below Represents the Payoff Matrix of Firms

question 80

Multiple Choice

The table given below represents the payoff matrix of firms A and B,when they choose to produce either high output or low output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs.

If X = 10 and Y = 15,then which of the following conclusions can be drawn from the information given in Table 14-3?

• A)The game has a Nash equilibrium and a dominant-strategy equilibrium.
• B)The game has a Nash equilibrium but not a dominant-strategy equilibrium.
• C)The game does not have a Nash equilibrium but has a dominant-strategy equilibrium.
• D)The game has neither a Nash equilibrium nor a dominant-strategy equilibrium.

---

Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was put into use.

Original Cost

The initial monetary value of an asset, including the purchase price and any related acquisition costs, but before depreciation or amortization.

Decrease

A reduction or decline in quantity, size, or overall value of an item or entity.

Investing Activity

Transactions involving the purchase and disposal of long-term assets and other investments, not including cash equivalents, part of a company’s cash flow statement.