Table 14-3 Suppose OPEC Has Only Two Producers, Saudi Arabia and Nigeria.Saudi

question 198

Multiple Choice

Table 14-3

Suppose OPEC has only two producers, Saudi Arabia and Nigeria.Saudi Arabia has far more oil reserves and is the lower-cost producer compared to Nigeria.The payoff matrix in Table 14-3 shows the profits earned per day by each country."Low output" corresponds to producing the OPEC assigned quota and "high output" corresponds to producing the maximum capacity beyond the assigned quota.
-Refer to Table 14-3.Is there a dominant strategy for Nigeria and, if so, what is it?

• A)Yes, it has a dominant strategy depending on what Saudi Arabia does.
• B)No, there is no dominant strategy.
• C)Yes, the dominant strategy is to produce a low output.
• D)Yes, the dominant strategy is to produce a high output.

---

Definitions:

Resource Suppliers

Entities or individuals that provide the essential inputs required for the production of goods and services, such as labor, raw materials, and capital.

Capitalist Income

Income generated through the ownership of capital assets like businesses, stocks, or real estate, often distinguishing the earnings of capitalists from laborers.

Economic Rent

The excess payment or profit made over the minimum amount required to bring a factor of production into use.