The Following Table Lists the Payoffs for Firm 1 and Firm

question 13

Multiple Choice

The following table lists the payoffs for Firm 1 and Firm 2 from three possible pricing strategies:
Table 10-3
$\begin{array}{l}\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Firm } 2\\\begin{array} { | c | c | c | c | } \hline \text { Firm 1 } & \text { High } & \text { Medium } & \text { Low } \\\hline \text { High } & 3,1 & 4,2 & 2,0 \\\hline \text { Medium } & 2,3 & 5,5 & 3,4 \\\hline \text { Low } & 5,4 & 7,5 & 5,2 \\\hline\end{array}\end{array}$
-Refer to Table 10-3. Identify Firm 1's dominant strategy.

• A) Its dominant strategy is medium prices.
• B) Firm 1 does not have a dominant strategy.
• C) Its dominant strategy is high prices.
• D) Its dominant strategy could be low or medium prices depending on Firm 2's response.
• E) Its dominant strategy is low prices.

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Definitions:

Dumping

The practice of selling a product in a foreign market at a price that is lower than the domestic market or below the cost of production.

Price Discrimination

The strategy of selling the same product or service at different prices to different groups of customers, often based on willingness to pay, market demand, or other factors.

Exporting

The process of selling and shipping goods or services from one country to another.

Wealth Gap

The uneven distribution of assets among residents of a particular country or the world, leading to significant disparities in wealth and economic status.