(Scenario: Payoff Matrix for Firms X and Y)Use Scenario: Payoff Matrix for Firms X and Y.If firm Y were to choose its dominant strategy,it would: Scenario: Payoff Matrix for Firms X and Y
The following payoff matrix depicts the profits for the only two firms in this oligopolistic industry.

Question

Quizplus · Accepted Answer

Firm Y's dominant strategy is to choose a high price, as this will result in the highest profit regardless of what firm X does. Choosing a low price would result in lower profit if firm X chooses a high price, and encountering a dilemma or allowing firm X to dominate the industry are not profitable outcomes.