Scenario: Payoff Matrix for Firms X and Y The following payoff matrix depicts the profits for firms X and Y, which are trying to decide whether to choose a high or low price in their competitive strategy with each other.They are the only two firms in this oligopolistic industry.
(Scenario: Payoff Matrix for Firms X and Y) In the scenario Payoff Matrix for Firms X and Y, if firm X were to choose its dominant strategy, it would:

Question

Quizplus · Accepted Answer

A dominant strategy is one that provides the highest payoff regardless of the other player's strategy. In this scenario, firm X's dominant strategy is to choose a high price, as it results in a higher profit compared to choosing a low price, regardless of what firm Y chooses. Therefore, the best choice for firm X would be to choose a high price.

Scenario: Payoff Matrix for Firms X and Y the Following