In the game depicted below,firms 1 and 2 must independently decide whether to charge high or low prices. $\begin{array}{c}
\text { Firm 2}\
\text { Firm 1}
\begin{array}{|l|l|l|}
\hline &\text { High Price } & \text { Low Price }\
\hline & & \
\text { High Price } & (10,10) & (5,-5) \
\hline & & \
\text { Low Price } & (-5,5) & (0,0)\
\hline
\end{array}\end{array}$ If player 1 charges a high price when player 2 charges a low price,then player 2 earns:
A) 10.
B) 5.
C) ?5.
D) 0.

Question

In the game depicted below,firms 1 and 2 must independently decide whether to charge high or low prices. $\begin{array}{c}
\text { Firm 2}\
\text { Firm 1}
\begin{array}{|l|l|l|} 
\hline &\text { High Price } & \text { Low Price }\
\hline & & \
\text { High Price } & (10,10) & (5,-5) \
\hline & & \
\text { Low Price } & (-5,5) & (0,0)\
\hline
\end{array}\end{array}$ If player 1 charges a high price when player 2 charges a low price,then player 2 earns:
A) 10.
B) 5.
C) ?5.
D) 0.

Quizplus · Accepted Answer

When player 1 charges a high price and player 2 charges a low price, the payoff matrix shows that player 2 earns -5.

In the Game Depicted Below,firms 1 and 2 Must Independently