Scenario: The payoff matrix given below shows the payoffs to two rival firms in millions of U.S. dollars for each strategy they choose. The first number listed in each cell is the payoff to the row player, and the second number listed is the payoff to the column player.

-Refer to the scenario above.Which of the following is true?
A) Firm A's dominant strategy is Strategy X.
B) Firm B's dominant strategy is Strategy Y.
C) Firm A is better off choosing Strategy X when Firm B chooses Strategy Y.
D) Firm B is better off choosing Strategy X when Firm A chooses Strategy Y.

Question

Scenario: The payoff matrix given below shows the payoffs to two rival firms in millions of U.S. dollars for each strategy they choose. The first number listed in each cell is the payoff to the row player, and the second number listed is the payoff to the column player.
 
-Refer to the scenario above.Which of the following is true?
A) Firm A's dominant strategy is Strategy X. 
B) Firm B's dominant strategy is Strategy Y. 
C) Firm A is better off choosing Strategy X when Firm B chooses Strategy Y. 
D) Firm B is better off choosing Strategy X when Firm A chooses Strategy Y.

Quizplus · Accepted Answer

Firm B's dominant strategy is Strategy X, as it has a higher payoff than Strategy Y regardless of the strategy chosen by Firm A. When Firm A chooses Strategy Y, Firm B is better off choosing Strategy X since it has a payoff of 8, which is higher than its payoff of 7 when choosing Strategy Y.

Scenario: the Payoff Matrix Given Below Shows the Payoffs to Two