The table given below represents the payoff matrix of firms A and B,when they choose to produce low or high output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs.
-Refer to Table 14-2.Which of the following statements about the two firms must be true?
A)If Firm B produces low output,Firm A will also produce low output.
B)If Firm B produces high output,Firm A will produce low output.
C)If Firm A produces high output,Firm B will also produce high output.
D)If Firm A produces low output,Firm B will produce high output.

Question

The table given below represents the payoff matrix of firms A and B,when they choose to produce low or high output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs. 
-Refer to Table 14-2.Which of the following statements about the two firms must be true?
A)If Firm B produces low output,Firm A will also produce low output. 
B)If Firm B produces high output,Firm A will produce low output. 
C)If Firm A produces high output,Firm B will also produce high output. 
D)If Firm A produces low output,Firm B will produce high output.

Quizplus · Accepted Answer

The statement suggests that Firm B's output decision is influenced by Firm A's decision to produce high output, indicating a strategic interdependence between the firms.

The Table Given Below Represents the Payoff Matrix of Firms