Given the Payoff Matrix in Table 25

question 16

Multiple Choice

$$\begin{array}{l}\begin{array} { | l | l | l | } \hline & { \text { Company XYZ's Possible Responses } } \\\hline \text { Company ABC's Action } & \text { Charge High Prices } & \text { Charge Low Prices } \\\hline \text { Charge high prices } & \text { Profit gain loss } = \$ 0 & \text { Profit loss } = \$ 5,000 \\\hline \text { Charge low prices } & \text { Profit gain } = \$ 50,000 & \text { Profit loss } = \$ 500 \\\hline\end{array}\\\text { Table } 25.1\end{array}$$ Given the payoff matrix in Table 25.1, if the probability of rivals matching a price reduction is 99 percent, what is the expected payoff for a price cut by Company ABC?

• A) $0.
• B) $5.
• C) -$500.
• D) -$5,000.

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Definitions:

Axon

A long fiber that extends from a neuron and transmits electrical impulses away from the neuron's cell body.

Myelin Sheath

A protective covering made of fatty substances that surrounds the axons of many nerve cells, aiding in the speedy transmission of electrical signals.

Synaptic Vesicles

Small sacs in the neuron that store neurotransmitters, which are released into the synaptic cleft to transmit nerve impulses to other neurons.

Axon Terminals

The distal terminations of the branches of an axon, making connections with other nerve cells or muscles and transferring the impulse.