The Table Below Shows the Payoff (Profit) Matrix of Firm

question 38

Multiple Choice

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms) .Table 12.2

-The condition under which a cartel can maintain its stability is that:

• A)the barriers to entry should be relaxed.
• B)an identical product should be produced by the colluding firms.
• C)there should be a large number of firms in a market.
• D)there should be legal barriers to share agreements.
• E)the products of the colluding firms should be highly differentiated.

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Definitions:

Shaping

A method of operant conditioning in which successive approximations of a desired behavior are reinforced until the exact behavior is achieved.

Reinforcer

In operant conditioning, any event that strengthens the behavior it follows.

Conditioned Stimulus

An initially neutral stimulus that, upon association with an unconditioned stimulus, elicits a conditioned response.

Unconditioned Stimulus

A trigger that inherently and effortlessly evokes a reaction without the need for previous learning.