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(Table: Two Rival Gas Stations) Look at the Table Two

Question 86

Multiple Choice

(Table: Two Rival Gas Stations) Look at the table Two Rival Gas Stations.Swifty Gas and Speedy Gas are the only two gas stations in a small town.Each firm can set either a high price or a low price, and customers view these two firms as nearly perfect substitutes.The table shows the payoff matrix of daily profits that each firm would receive from its pricing decision, given the pricing decision of its rival.Profits in each cell of the payoff matrix are given as (Swifty, Speedy) .Which of the following choices describes a dominant strategy?


A) Swifty will always set a low price, no matter Speedy's choice.
B) Swifty will always set a high price, no matter Speedy's choice.
C) Swifty will set a low price when Speedy sets a high price, but Swifty will set a high price when Speedy sets a low price.
D) Swifty will set a high price when Speedy sets a high price, but Swifty will set a low price when Speedy sets a low price.

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