The prisoner's dilemma shown displays the payoffs associated with two firms: Firm A and Firm B. These firms are in an oligopoly and they can choose to either collude or compete.
Given the payoffs in this matrix, Firm B:
A) should always choose to collude, regardless of Firm A's actions.
B) should always choose to compete, regardless of Firm A's actions.
C) should compete if Firm A competes and collude if Firm A colludes.
D) should compete if Firm A colludes and collude if Firm A competes.
Correct Answer:
Verified
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