-Dell and Gateway must decide whether to lower their prices, based on the potential economic profits shown in the payoff matrix above. (The profits are in millions of dollars.) If the firms collude and don't cheat, Dell's profit is ________ million and Gateway's profit is ________ million.
A) $10; $10
B) $15; $15
C) $5; $20
D) $20; $5

Question

-Dell and Gateway must decide whether to lower their prices, based on the potential economic profits shown in the payoff matrix above. (The profits are in millions of dollars.) If the firms collude and don't cheat, Dell's profit is ________ million and Gateway's profit is ________ million.
A) $10; $10 
B) $15; $15 
C) $5; $20 
D) $20; $5

Quizplus · Accepted Answer

If both firms collude and don't cheat, they will choose the option that maximizes their combined profits, which is $15 million for each.

-Dell and Gateway Must Decide Whether to Lower Their Prices