Table 17-22 Brian and Matt Own the Only Two Bicycle Repair Shops

question 239

Multiple Choice

Table 17-22
Brian and Matt own the only two bicycle repair shops in town. Each must choose between a low price for repair work and a high price. The annual economic profit from each strategy is indicated in the table. The profits are shown as (Matt, Brian) in each cell.
-Refer to Table 17-22. Which of the following statements is correct if Brian and Matt will play this game only once?

• A)The Nash equilibrium is the high price.
• B)A Nash equilibrium cannot be established unless Brian and Matt collude.
• C)A Nash equilibrium cannot be established without the players repeating the game.
• D)The Nash equilibrium price is the low price.

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