Joe is the owner of the PetroCanada Mini Mart,Sam is the owner of the BP Mini Mart,and together they are the only gas stations in town.At the current price of $1 per litre,each receives total revenue of $1000.Joe is considering cutting his price to 90 cents per litre,which would increase his total revenue to $1350.If Sam's price remains at $1 per litre after Joe cuts his price,Sam will collect $500 in revenue.If Sam cuts his price to 90 cents per litre,his total revenue would also rise to $1350 if Joe continues to charge $1 per litre.Joe will collect $500 in revenue if he keeps his price at $1 per litre while Sam lowers his to 90 cents per litre.Joe and Sam will receive $900 each in total revenue if they both lower their price to 90 cents per litre.You may find it easier to answer the following questions if you fill in the payoff matrix below.
-Refer to the information given above.In this game,the strategies available to Joe are
A) cut price to 90 cents per litre.
B) leave price at $1 per litre.
C) cut price to 85 cents per litre.
D) cut price to some extent or leave price at $1 per litre.
E) cut price to 90 cents per litre or leave price at $1 per litre.

Question

Joe is the owner of the PetroCanada Mini Mart,Sam is the owner of the BP Mini Mart,and together they are the only gas stations in town.At the current price of $1 per litre,each receives total revenue of $1000.Joe is considering cutting his price to 90 cents per litre,which would increase his total revenue to $1350.If Sam's price remains at $1 per litre after Joe cuts his price,Sam will collect $500 in revenue.If Sam cuts his price to 90 cents per litre,his total revenue would also rise to $1350 if Joe continues to charge $1 per litre.Joe will collect $500 in revenue if he keeps his price at $1 per litre while Sam lowers his to 90 cents per litre.Joe and Sam will receive $900 each in total revenue if they both lower their price to 90 cents per litre.You may find it easier to answer the following questions if you fill in the payoff matrix below. 
-Refer to the information given above.In this game,the strategies available to Joe are
A) cut price to 90 cents per litre. 
B) leave price at $1 per litre. 
C) cut price to 85 cents per litre. 
D) cut price to some extent or leave price at $1 per litre. 
E) cut price to 90 cents per litre or leave price at $1 per litre.

Quizplus · Accepted Answer

According to the given information, if Joe cuts his price to 90 cents per litre and Sam keeps his price at $1 per litre, Joe's total revenue will increase to $1350. If Sam cuts his price to 90 cents per litre and Joe keeps his price at $1 per litre, Sam's total revenue will also increase to $1350. Therefore, the best choice for Joe is to cut his price to 90 cents per litre or leave it at $1 per litre, as it ensures maximum total revenue of $1350. This choice is also the best for Sam, as it also ensures maximum total revenue of $1350. Therefore, the best strategy available to both Joe and Sam is to either cut their price to 90 cents per litre or leave it at $1 per litre.

Joe Is the Owner of the PetroCanada Mini Mart,Sam Is