Figure 17-4

Figure 17-4. Two companies, Acme and Bilco, are sellers in the same market. Each company decides whether to charge a high price or a low price. In the figure, the dollar amounts are payoffs and they represent annual profits for the two companies.

-Refer to Figure 17-4.Suppose we observe that the outcome of the game is one in which each company earns a profit of $5 million.This outcome

A) is the result of each company pursuing its dominant strategy.
B) is the result of cooperation between the two companies, and we know that a cooperative outcome is easy in a game such as this one.
C) is the result of cooperation between the two companies, and we know that a cooperative outcome is difficult in a game such as this one.
D) is the most likely outcome of the game, regardless of whether the two companies cooperate.