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

question 18

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 free rider problem occurs because:

• A)it is easy to exclude others from consuming a good.
• B)consumption is rivalrous, so the consumption of a product by one individual diminishes the amount available for others.
• C)exclusion is costly or impossible, so a consumer or producer can use a good without having to pay for it.
• D)external costs are imposed on others not directly involved in the transaction.
• E)individuals are not required to pay for those goods which do not yield any utility to them.

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Definitions:

Property Rights

The legal rights to possess, use, and dispose of assets including real property, personal property, and intellectual property.

Negatively Affects

Leads to adverse consequences or reduces the quality or performance of something.

Air Traffic

The movement of aircraft within the air space controlled by various authorities, including commercial, private, and military flights.

Perfectly Competitive

A market structure characterized by many sellers offering identical products, leading to price determination through supply and demand forces without individual control.