The Following Payoff Matrix Shows the Possible Profits That Each

question 44

Multiple Choice

The following payoff matrix shows the possible profits that each firm will earn under different pricing strategies. The firms can choose to have lower prices in order to lure away customers from the competitors or higher prices in order to increase their profits. The profits are measured in million dollars. In the game, _____.Figure 9.5:

• A)the dominant strategy of General Mills is to set a high price
• B)the dominant strategy of Kellogg's is to set a low price
• C)the dominant strategy of Kellogg's is to set a high price
• D)neither firm has a dominant strategy
• E)the Nash equilibrium is to keep prices high

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