Australian

-There are two can companies, Australian and National, which have entered into a collusive agreement. The payoff matrix of economic profits is above. If National is able to cheat on the agreement but Australian complies with the agreement, what amount of economic profit is made by National?
A) $3,000
B) $2,000
C) $6,000
D) $4,000

Question

Australian
 
-There are two can companies, Australian and National, which have entered into a collusive agreement. The payoff matrix of economic profits is above. If National is able to cheat on the agreement but Australian complies with the agreement, what amount of economic profit is made by National?
A) $3,000 
B) $2,000 
C) $6,000 
D) $4,000

Quizplus · Accepted Answer

In a collusive agreement scenario, if one party cheats while the other complies, the cheating party typically reaps a higher reward. Without the specific payoff matrix provided, we rely on common outcomes in such situations. The question implies National benefits from cheating while Australian complies, suggesting National achieves a higher-than-agreement profit. Among the provided options, $4,000 represents a plausible higher profit for the cheating party in typical economic models of collusion.

Australian -There Are Two Can Companies, Australian and National, Which Have