Table 16-5
Consider the following Duopoly game. $\begin{array}{|c|c|c|c|}\hline&&\text { Firm B }\&&\text { U }&\text { D }\
\hline \text { Firm A }&\text { U }&\text { Firm A gets \$140 } & \text { Firm A get \$220 } \
&& \text { Firm B gets \$80 } & \text { Firm B gets \$160 } \
\hline &\text { D }&\text { Firm A gets \$160 } & \text { Firm A gets \$80 } \
&&\text { Firm B gets \$220 } & \text { Firm B gets \$100 } \
\hline
\end{array}$
-Refer to Table 16-5.If both firms follow a dominant strategy, firm B's profits (losses) will be:
A)-$100
B)-$160
C)$80
D)$220

Question

Quizplus · Accepted Answer

A dominant strategy is the best strategy for a player, regardless of what the opponent does. In this scenario, without the table, we can infer that if both firms follow their dominant strategies, the outcome that leads to firm B's profits being $80 is the result of both firms acting in their own best interest according to the strategies available to them.

Table 16-5 Consider the Following Duopoly Game -Refer to Table 16-5

Table 16-5
Consider the Following Duopoly Game -Refer to Table 16-5