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

question 128

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. This game would be considered a prisoner's dilemma if X is between ________. $\begin{array} { l }&\text { Tempurpedic }\\\text { Sealy }&\begin{array} { l }\quad\quad\text { Produce } 3,000 \text {mattresses }\quad\text { Produce } 4,000 \text { mattresses}\\\begin{array} { l } \text { Produce} \\ \text {3,000} \\ \text {mattresses } \\\\ \text { Produce} \\ \text { 4,000} \\ \text {mattresses } \\\end{array}\begin{array}{|l|l|}\hline \$25,000\quad\quad\quad&\$35,000\quad\quad\quad \\\\\$25,000&\$10,000\\\hline \$10,000&X\\\\\$35,000&X \\\\\hline\end{array}\end{array}\end{array}$

• A) $10,000 and $25,000
• B) $25,000 and $35,000
• C) $10,000 and $35,000
• D) $35,000 and $70,000
• E) $45,000 and $70,000

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Definitions:

Internal Relay Coil

An internal relay coil is a virtual or logical coil in programmable logic controllers (PLCs) or software applications, representing the state of an output or condition without requiring a physical relay.

I/O Rack

A physical or virtual component that houses input/output modules, facilitating the exchange of data between a control system and external devices.

CPU

The Central Processing Unit, often considered the main element of a computer, is responsible for executing the majority of computations within the system.

Interest Rate

The cost of borrowing money or the return on investment, typically expressed as a percentage of the principal for a given period.