The table given below represents the payoff matrix of firms A and B,when they choose to produce either high output or low 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.
-If X = 10 and Y = 15,then which of the following conclusions can be drawn from the information given in Table 14-3?
A)The game has a Nash equilibrium and a dominant-strategy equilibrium.
B)The game has a Nash equilibrium but not a dominant-strategy equilibrium.
C)The game does not have a Nash equilibrium but has a dominant-strategy equilibrium.
D)The game has neither a Nash equilibrium nor a dominant-strategy equilibrium.

Question

The table given below represents the payoff matrix of firms A and B,when they choose to produce either high output or low 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. 
-If X = 10 and Y = 15,then which of the following conclusions can be drawn from the information given in Table 14-3?
A)The game has a Nash equilibrium and a dominant-strategy equilibrium. 
B)The game has a Nash equilibrium but not a dominant-strategy equilibrium. 
C)The game does not have a Nash equilibrium but has a dominant-strategy equilibrium. 
D)The game has neither a Nash equilibrium nor a dominant-strategy equilibrium.

Quizplus · Accepted Answer

A Nash equilibrium exists when players choose strategies that are best responses to each other, but a dominant-strategy equilibrium requires a strategy to be the best regardless of the opponent's choice, which is not guaranteed here.

The Table Given Below Represents the Payoff Matrix of Firms