Bert and Ernie Are Noncolluding Oligopolists

question 5

Multiple Choice

Bert and Ernie are noncolluding oligopolists.If both choose a high price strategy,each makes $40 in profits; if both choose a low price strategy,each makes $30 in profits.If Bert chooses a high price strategy and Ernie chooses a low price strategy,Bert makes $20 in profits and Ernie makes $60 in profits,while if Bert chooses a low price strategy and Ernie chooses a high price strategy,Bert makes $60 in profits and Ernie makes $20 in profits.Which combination of pricing strategies would you expect Bert and Ernie to adopt if they act independently?

• A) Both choose a high price strategy.
• B) Both choose a low price strategy.
• C) Bert chooses a high price strategy and Ernie chooses a low price strategy.
• D) Bert chooses a low price strategy and Ernie chooses a high price strategy.

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Definitions:

Loss Of Appetite

A decreased desire to eat, which can be due to various factors including emotional distress, illness, or medication side effects.

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A common cognitive issue where an individual finds it challenging to focus their attention on specific tasks or for an extended period of time.

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A personality trait characterized by anxiety, fear, moodiness, worry, envy, frustration, jealousy, and loneliness.

Big Five

A model of personality that outlines five broad dimensions: openness, conscientiousness, extraversion, agreeableness, and neuroticism.