Refer to the Following Game

question 26

Multiple Choice

Refer to the following game. Which of the following is true?

• A) A dominant strategy for firm A is "high price."
• B) There does not exist a dominant strategy for firm A.
• C) A dominant strategy for firm B is "low price."
• D) None of the answers is correct.

---

Definitions:

Real Wages

Wages adjusted for inflation, reflecting the true purchasing power of the earnings of the workforce.

Nominal Wage

The amount of money paid to employees without adjustment for inflation or purchasing power.

Price Level

An index that measures the average of the prices over a range of products and services, reflecting the cost of living or inflation.

Real Wage

This is the purchasing power of a person's earnings, considering the effects of inflation on buying goods and services.