The Accompanying Table Shows Two Firms in a Single-Stage Duopoly

question 2

Multiple Choice

The accompanying table shows two firms in a single-stage duopoly game. Each firm makes its decision without knowledge of the other firm's decision. The payoffs for each firm represent economic profits, and each firm strictly prefers more economic profit than less. Assume firms are not able to collude. The Nash equilibrium total quantity of potatoes on the market is: $\begin{array} { l }&\text { Country Potato Farm }\\\text { City Potato Farm }&\begin{array} { l }\quad\quad\text { Produce } 5,000 \text {Potatoes }\quad\quad\text { Produce } 5,000 \text { Potatoes}\\\begin{array} { l } \text { Produce} \\ \text { 5,000} \\ \text {Potatoes } \\\\ \text { Produce} \\ \text { 7,000} \\ \text {Potatoes } \\\end{array}\begin{array}{|l|l|}\hline \$25,000\quad\quad\quad&\$35,000\quad\quad\quad \\\\\$25,000&\$10,000\\\hline \$10,000&\$12,000\\\\\$35,000&\$12,000 \\\\\hline\end{array}\end{array}\end{array}$

• A) 12,000
• B) 4,000
• C) 10,000
• D) 14,000
• E) 24,000

---

Definitions:

Heart Rate

The number of heartbeats per unit of time, typically expressed in beats per minute (bpm).

Magnetic Resonance Imaging

A medical imaging technique used in radiology to form pictures of the anatomy and the physiological processes of the body.

Lie-Detection Methods

Techniques used to determine the veracity of an individual's statements, typically involving physiological measurements such as polygraph tests.

Polygraphs

Lie detector tests that measure and record several physiological indicators such as blood pressure, pulse, respiration, and skin conductivity while the subject answers a series of questions.