What are dominant strategies for Firm A and Firm B respectively?
A)(low price, high price).
B)(high price, low price).
C)(high price, high price).
D)(low price, low price).

Question

Quizplus · Accepted Answer

Both Firm A and Firm B have a dominant strategy of choosing a low price. This is because regardless of what the other firm does, choosing a low price will result in a higher profit for each firm than choosing a high price. Therefore, both firms will choose a low price, resulting in the outcome of (low price, low price). This is the best choice for both firms as it maximizes their profits.

What Are Dominant Strategies for Firm a and Firm B