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

question 68

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 Brawny Juice selects a high price, what is Power Fuel's best strategy and what will Power Fuel earn as a result of this strategy?

• A)Power Fuel will select a low price and earn $8 million.
• B)Power Fuel will select a low price and earn $16 million.
• C)Power Fuel will select a high price and earn $12 million.
• D)Power Fuel will select a high price and earn $16 million.

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Definitions:

Six-Figure Accuracy

A level of precision in numerical calculations or measurements that extends to six digits.

Exponent

In mathematics, a number or symbol, notably placed above and to the right of a mathematical expression, denoting the power to which a given expression is to be raised.

Calculate To Cent

The process of rounding calculations to the nearest cent, often used in financial computations.

Powers

The result of raising a base number to the exponent specified, indicating how many times the base is multiplied by itself.