(Table: Firms A and B I) The payoffs represent profits measured in thousands of dollars. In this infinitely repeated game, Firm A and Firm B are both using grim trigger strategies; they agree to charge a high price in period one. If Firm A charges a high price for all periods, what is its expected payoff? Assume that d = 0.9.
A) $720,000
B) $3 million
C) $364,000
D) $200,000

Question

(Table: Firms A and B I) The payoffs represent profits measured in thousands of dollars.  In this infinitely repeated game, Firm A and Firm B are both using grim trigger strategies; they agree to charge a high price in period one. If Firm A charges a high price for all periods, what is its expected payoff? Assume that d = 0.9.
A) $720,000 
B) $3 million 
C) $364,000 
D) $200,000

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The Answer of (Table: Firms A and B I) The payoffs represent profits measured in thousands of dollars.  In this infinitely repeated game, Firm A and Firm B are both using grim trigger strategies; they agree to charge a high price in period one. If Firm A charges a high price for all periods, what is its expected payoff? Assume that d = 0.9.
A) $720,000 
B) $3 million 
C) $364,000 
D) $200,000

(Table: Firms a and B I) the Payoffs Represent Profits