Use the following table to answer the question : Table 15-1: payoff matrix shows the profits accruing to two firms,Company C and Company D,under different pricing strategies.In each cell,the figure on the left indicates Company C's payoff and the figure on the right indicates Company D's payoff.

-Refer to Table 15-1.If X = 135 and Y = 75,the method of iterated dominance can be used to conclude that company C's strategy of choosing a _____ price is dominated by a strategy of a _____ price.
A)high;low
B)medium;low
C)low;medium
D)high;medium

Question

Use the following table to answer the question : Table 15-1: payoff matrix shows the profits accruing to two firms,Company C and Company D,under different pricing strategies.In each cell,the figure on the left indicates Company C's payoff and the figure on the right indicates Company D's payoff.

-Refer to Table 15-1.If X = 135 and Y = 75,the method of iterated dominance can be used to conclude that company C's strategy of choosing a _____ price is dominated by a strategy of a _____ price.
A)high;low 
B)medium;low 
C)low;medium 
D)high;medium

Quizplus · Accepted Answer

Using the method of iterated dominance, we first eliminate strategy (12,8) because it is dominated by (10,10). Then, we eliminate (14, 7) because it is dominated by (10, 10). Next, we eliminate (15, 5) because it is dominated by (10, 10). Finally, we are left with only one option for Company C, which is to choose a low price of 8. Therefore, the answer is C (low; medium).

Use the Following Table to Answer the Question : Table