Figure: Payoff Matrix for the United States and the European Union
(Figure: Payoff Matrix for the United States and the European Union) Look at the figure Payoff
Matrix for the United States and the European Union.Suppose that the United States and the European Union both produce corn, and each region can make more profit if output is limited and the price of corn is high.If either region increases its output of corn, the profits of both are affected as shown in the payoff matrix.The optimal combination is for:

Question

Quizplus · Accepted Answer

Producing a low output is the optimal combination for both the United States and the European Union. This results in both regions earning a profit of 3, which is the highest possible payoff for both regions. In any other combination, one region earns a lower profit while the other earns a higher profit, leading to an outcome that is suboptimal for at least one region.