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Figure: Payoff Matrix for Gehrig and Gabriel
-(Figure: Payoff Matrix for Gehrig and Gabriel) The figure Payoff Matrix for Gehrig and Gabriel describes two people who sell handmade Davy Crockett figurines in San Antonio. Both Gehrig and Gabriel have two strategies available to them: to produce 5,000 figurines each month or to produce 7,000 figurines each month. For Gehrig and Gabriel, the dominant strategy is to:
A) produce 5,000 figurines.
B) produce 7,000 figurines.
C) produce between 5,000 and 7,000 figurines.
D) collude and increase production to more than 14,000 figurines.

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Use the following to answer questions:
Figure: Payoff Matrix for Gehrig and Gabriel 
-(Figure: Payoff Matrix for Gehrig and Gabriel) The figure Payoff Matrix for Gehrig and Gabriel describes two people who sell handmade Davy Crockett figurines in San Antonio. Both Gehrig and Gabriel have two strategies available to them: to produce 5,000 figurines each month or to produce 7,000 figurines each month. For Gehrig and Gabriel, the dominant strategy is to:
A) produce 5,000 figurines. 
B) produce 7,000 figurines. 
C) produce between 5,000 and 7,000 figurines. 
D) collude and increase production to more than 14,000 figurines.

Quizplus · Accepted Answer

The dominant strategy is the one that provides a higher payoff regardless of the other player's action. If producing 7,000 figurines yields a better outcome for both Gehrig and Gabriel, regardless of the other's choice, then it is the dominant strategy.

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