-The Only Two Firms in a Market Are Trying to Decide

question 94

Multiple Choice

-The only two firms in a market are trying to decide what price to charge.The payoff matrix for this duopoly game is shown above.The payoffs are thousands of dollars of economic profit.In the above game,in the Nash equilibrium,

• A) Firm A and Firm B are both making $40,000 in economic profit.
• B) Firm A and Firm B are both making $55,000 in economic profit.
• C) Firm A is making $60,000 and Firm B is making $55,000 in economic profit.
• D) Firm A and Firm B are both making $60,000 in economic profit.
• E) Firm A and Firm B are both making $35,000 in economic profit.

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Definitions:

Socio-economic Status

A combined measurement of an individual's or family's economic and social position in relation to others, based on income, education, and occupation.

Achieved Status

A social position that a person attains through their own efforts or accomplishments, rather than by birth.

Absolute Power

The concept of having unrestricted power without any limitations on one's authority, often associated with monarchies or dictatorships where a single entity or individual holds supreme control.

Machiavelli

Refers to Niccolò Machiavelli, an Italian Renaissance political philosopher and diplomat, best known for his works on power dynamics and political strategy, notably in "The Prince."