In the Following Two-Person Zero-Sum Game, the Payoffs Represent Gains $\left[ \begin{array} { l l } 5 & 2 \\2 & 1\end{array} \right]$

question 22

Multiple Choice

In the following two-person zero-sum game, the payoffs represent gains to the row player I and losses to the column player II.
$\left[ \begin{array} { l l } 5 & 2 \\2 & 1\end{array} \right]$
Which of the following statements is true?

• A) The game has no saddlepoint.
• B) The game has a saddlepoint; the value of the game is 1.
• C) The game has a saddlepoint; the value of the game is 2.
• D) The game has a saddlepoint; the value of the game is 5.

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Definitions:

Marginal Cost

The cost of producing one more unit of a good or service, reflecting the increase in total cost that comes from increasing the level of production by one unit.

Maximize Profits

A business objective aiming to achieve the highest possible financial gain from operations.

Economic Profit

The surplus remaining after total costs (both explicit and implicit) are deducted from total revenue, reflecting the true profitability of a firm.

ATC

Average Total Cost, which is the total cost divided by the quantity of output produced, reflecting the cost per unit of output.