Within a Game Theory Model, If a Change in Decision-Making

question 93

Multiple Choice

Within a game theory model, if a change in decision-making raises corporation A's profits by $100 and lowers corporation B's profits by $200, the game is a

• A) negative-sum game.
• B) zero-sum game.
• C) positive-sum game.
• D) cooperative game.

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Definitions:

Total Revenue

The amount a firm receives for the sale of its output.

Nash Equilibrium

A concept within game theory where no participant can gain by a unilateral change of strategy if the strategies of the others remain unchanged.

Profit-Maximizing

The process by which a firm determines the price and output level that returns the maximum profit.

Marginal Cost

The increase or decrease in the total cost that arises from producing one additional unit of a product.