The Following Matrix Shows the Pricing Strategies and Resultant Profits

question 47

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 the firms are able to enforce a collusive agreement, which of the following is most likely?

• A) Firm A will earn profit equal to $41,000.
• B) Firm A will earn a higher profit than Firm B.
• C) Firm A will set a high price while Firm B will set a low price.
• D) Firm A and Firm B will earn set a low price.
• E) Firm A and Firm B will earn profit equal to $35,000.

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Definitions:

Codon

A sequence of three nucleotides in mRNA that specifies the addition of a specific amino acid or the termination of translation.

Arginine

An essential amino acid that plays a pivotal role in protein synthesis and multiple metabolic processes.

Sequence

An ordered list of objects, numbers, or events arranged in a specific pattern.

Glycine

The smallest of the 20 standard amino acids and a key component in the biosynthesis of proteins.