Use the following table to answer the question : Table 14-2 : 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.

-Given the information in Table 14-2,which of the following can be concluded about the strategies of the two firms?
A)Firm A's dominant strategy is to produce high output,while Firm B's dominant strategy is to produce low output.
B)Firm A's dominant strategy is to produce low output,while Firm B's dominant strategy is to produce high output.
C)Firm A's dominant strategy is to produce low output,while Firm B does not have a dominant strategy.
D)Firm A's dominant strategy is to produce high output,while Firm B does not have a dominant strategy.

Question

Use the following table to answer the question : Table 14-2 : 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.

-Given the information in Table 14-2,which of the following can be concluded about the strategies of the two firms?

-Given the information in Table 14-2,which of the following can be concluded about the strategies of the two firms?
A)Firm A's dominant strategy is to produce high output,while Firm B's dominant strategy is to produce low output. 
B)Firm A's dominant strategy is to produce low output,while Firm B's dominant strategy is to produce high output. 
C)Firm A's dominant strategy is to produce low output,while Firm B does not have a dominant strategy. 
D)Firm A's dominant strategy is to produce high output,while Firm B does not have a dominant strategy.

Quizplus · Accepted Answer

A dominant strategy is one that results in the highest payoff for a firm, regardless of the other firm's actions. Without the specific payoffs from Table 14-2, we can't directly analyze the strategies. However, based on the given choices, if we assume Firm A's dominant strategy is to produce high output, it implies that no matter what Firm B does, Firm A benefits more from producing high output. If Firm B does not have a dominant strategy, it means its best response depends on what Firm A does, which aligns with choice D's scenario. This explanation is hypothetical and assumes the question is based on understanding dominant strategies in game theory.

Use the Following Table to Answer the Question : Table