Table 14-2 Ming and Henri Each Run One of the Two

question 96

Multiple Choice

Table 14-2 Ming and Henri each run one of the two dry cleaning facilities in the town of Scaraby.Both consider offering free pickup and delivery services.Table 14-2 shows the payoff matrix containing the expected quarterly profits for each firm.
-Refer to Table 14-2.Does Henri have a dominant strategy? If yes,what is it?

• A)Yes,Henri's dominant strategy is to not offer free pickup and delivery.
• B)Yes,Henri's dominant strategy is to offer free pickup and delivery.
• C)No,Henri does not have a dominant strategy - his best outcome depends on what Ming does.
• D)Yes,Henri's dominant strategy is to wait and see what Ming does first.

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Definitions:

Benevolent Social Planner

A theoretical construct representing an entity or policymaker that aims to achieve the most efficient and equitable outcomes for society as a whole, often seen in economic models.

Socially Efficient

A condition where resources are allocated in a way that maximizes the overall benefit to society, taking into account all externalities.

Marginal Revenue

The additional income obtained from selling one more unit of a good or service, critical in determining the optimal level of production for a firm.

Profits Maximize

The process or strategy by which a firm seeks to achieve the highest possible return or benefit from its operations and resources.