The table below shows the payoff matrix in the form of short-run profit for two firms,A and B,for two different strategies,investing in new capital or not investing.
-Refer to the payoff matrix above.For firm B,
A) investing is its dominated strategy.
B) not investing is its dominated strategy.
C) it has no dominated strategy.
D) not investing is its dominant strategy.
E) it has no dominant strategy.

Question

The table below shows the payoff matrix in the form of short-run profit for two firms,A and B,for two different strategies,investing in new capital or not investing. 
-Refer to the payoff matrix above.For firm B,
A) investing is its dominated strategy. 
B) not investing is its dominated strategy. 
C) it has no dominated strategy. 
D) not investing is its dominant strategy. 
E) it has no dominant strategy.

Quizplus · Accepted Answer

Based on the payoff matrix, not investing is a better strategy for Firm B regardless of the decision made by Firm A. Therefore, investing is dominated by not investing.

The Table Below Shows the Payoff Matrix in the Form