The Following Matrix Shows the Pricing Strategies and Resultant Profits

question 41

Multiple Choice

The following matrix shows the pricing strategies and resultant profits (in thousands of dollars) for two profit-maximizing firms.
Table 9-1
$\begin{array} {c}\quad\quad \text { Firm B} \\\begin{array}{ | c | c | c | } \hline \text { Firm } \mathrm { A } & \text { High } & \text { Low } \\\hline \text { High price } & 35,35 & 21,41 \\\hline \text { Low price } & 37,21 & 30,30 \\\hline\end{array} \end{array}$
-Refer to Table 9-1. If both the firms act noncooperatively, which of the following is most likely?

• A) Firm B will set a high price.
• B) Both Firm A and Firm B will earn profit equal to $35,000.
• C) Both Firm A and Firm B will set a low price.
• D) Firm A will set a high price.
• E) Firm A's profit will be equal to $37,000.

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Definitions:

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