Multiple Choice
The diagram shows the extensive form version of a strategic game between the two nationally dominant coffee sellers, Corporate Coffee and Jumbo Java, both of whom are considering opening coffee shops in a new town. The payoffs represent, in thousands per month, the profit (or loss) the firm will realize from its decision. Which of the following statements is true about this game?
A) It would be a Stackelberg duopoly if both firms gained from entering the new market.
B) It represents a Stackelberg duopoly.
C) It would be a Stackelberg duopoly if Jumbo Java could prevent Corporate Coffee's entry into the market.
D) It would be a Stackelberg duopoly if the two firms moved simultaneously.
Correct Answer:
Verified
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