Table 17-37
Two restaurants with a focus on Mexican dining operate in Texama. Both Mitch's Mexican and Tim's Tacos need to decide whether to add Zesty Queso or Fresh Guacamole to their menus. The circumstances are that each firm wants to add only one of the two choices on their menu. Below you will find the profits for the stores, shown as: (1) the payoff to Mitch; (2) the payoff to Tim.
-Refer to Table 17-37. Based upon the information from the table, which firm has a dominant strategy?

Question

Table 17-37​
Two restaurants with a focus on Mexican dining operate in Texama. Both Mitch's Mexican and Tim's Tacos need to decide whether to add Zesty Queso or Fresh Guacamole to their menus. The circumstances are that each firm wants to add only one of the two choices on their menu. Below you will find the profits for the stores, shown as: (1) the payoff to Mitch; (2) the payoff to Tim.  ​
-Refer to Table 17-37. Based upon the information from the table, which firm has a dominant strategy?

Quizplus · Accepted Answer

Both firms have a dominant strategy of adding Fresh Guacamole to their menus since it results in the highest profit for each firm regardless of the other's decision. In other words, Fresh Guacamole is a dominant strategy for both firms. Therefore, both firms should add Fresh Guacamole to their menus.

Table 17-37​ Two Restaurants with a Focus on Mexican Dining Operate in Operate

Table 17-37 Two Restaurants with a Focus on Mexican Dining Operate in Operate