The payoff matrix below shows the payoffs for Firm A and Firm B,each of whom can either "cooperate" or "cheat." The numbers in parentheses are (payoff for A,payoff for B). $\begin{array}{c}
&\text { Firm B }\
\text { Firm A }&
\begin{array}{l|cr}
& \text { Coop erate } & \text { Cheat } \
\hline \text { Cooperate } & (30,30) & (10, x) \
\text { Cheat } & (x, 10) & (20,20)
\end{array}\end{array}$
-Consider the following characteristics of a particular industry: - each firm faces a demand curve with a price elasticity greater than 10 000
- each firm produces at a minimum efficient scale in long- run equilibrium This industry is likely to be

Question

The payoff matrix below shows the payoffs for Firm A and Firm B,each of whom can either "cooperate" or "cheat." The numbers in parentheses are (payoff for A,payoff for B). $\begin{array}{c}
&\text { Firm B }\
\text { Firm A }&
\begin{array}{l|cr} 
& \text { Coop erate } & \text { Cheat } \
\hline \text { Cooperate } & (30,30) & (10, x) \
\text { Cheat } & (x, 10) & (20,20)
\end{array}\end{array}$
-Consider the following characteristics of a particular industry: - each firm faces a demand curve with a price elasticity greater than 10 000
- each firm produces at a minimum efficient scale in long- run equilibrium This industry is likely to be

Quizplus · Accepted Answer

In a perfectly competitive market, firms face highly elastic demand curves, and they produce at minimum efficient scale in long-run equilibrium.

The Payoff Matrix Below Shows the Payoffs for Firm a and Firm