Table 14-5 Two Rival Oligopolists in the Athletic Supplements

question 56

Multiple Choice

Table 14-5 Two rival oligopolists in the athletic supplements industry,the Power Fuel Company and the Brawny Juice Company,have to decide on their pricing strategy.Each can choose either a high price or a low price.Table 14-5 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts.
-Refer to Table 14-5.If the firms act out of individual self-interest,which prices will they select?

• A)Both firms will select a high price.
• B)Brawny Juice will select a high price,Power Fuel will select a low price.
• C)Brawny Juice will select a low price,Power Fuel will select a high price.
• D)Both firms will select a low price.

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