The Following Payoff Matrix Shows the Profits Accruing to Two

question 40

Multiple Choice

The following payoff matrix shows the profits accruing to two firms, Company A and Company B, under different pricing strategies. In each cell, the figure on the left indicates Company A’s payoff and the figure on the right indicates Company B’s payoff.
Table 15-2

Refer to Table 15-2.Using iterated dominance,one can conclude that in equilibrium:

• A)company A chooses a high price and company B chooses a medium price.
• B)both company A and company B choose a high price.
• C)both company A and company B choose a medium price.
• D)company A chooses a medium price and company B chooses a high price.

---

Definitions:

AIDA

An acronym standing for Attention, Interest, Desire, Action; a marketing model that outlines the process for achieving successful advertising or sales.

Unidirectional

Refers to a process or communication that moves in one direction only, without a return path or feedback loop.

Audiences

Groups of individuals who receive and react to messages, such as those in media, communications, or presentations.

Deductive Reasoning

A logical process in which a conclusion is based on the concordance of multiple premises that are generally assumed to be true.