Table 14-7 the Payoff Matrix Shown Above Assumes That Perfect Plants and Assumes

question 134

Multiple Choice

Table 14-7

The payoff matrix shown above assumes that Perfect Plants and Florabunda Florist must decide whether to offer same-day delivery for their products.The matrix shows how much profit each firm will earn if it does or does not offer same-day delivery.The amount of profit for one firm depends on whether the other firm offers same-day delivery.
-Refer to Table 14-7.Which of the following statements is true?

• A)Given that Florabunda offers same-day delivery, Perfect's best strategy is to not offer same-day delivery.
• B)Given that Perfect offers same-day delivery, Florabunda's best strategy is to offer same-day delivery.
• C)Perfect and Florabunda will agree to collude in order to maximize their profits.
• D)Neither Perfect nor Florabunda will offer same-day delivery; this decision will decrease their costs and allow each firm to earn more than $1,800 million in profits.

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