Table 14-8 Two Rival Oligopolists in the Athletic Supplements Industry, the Power

question 195

Multiple Choice

Table 14-8

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 14-8 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts.
-Refer to Table 14-8.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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Definitions:

Psoriasis

A chronic autoimmune skin disease that speeds up the growth cycle of skin cells, causing red, scaly patches.

Macule

A flat, distinct, colored area of the skin less than 1 centimeter wide that does not involve any change in the thickness or texture of the skin.

Anhidrosis

The inability to sweat normally, which can lead to overheating.

Evaporation

The process by which water changes from a liquid to a gas or vapor, often contributing to the water cycle.