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.In the dominant strategy equilibrium,the payoff to Firm A is ________.
A) $1.2 million
B) $3.0 million
C) $3.5 million
D) $2.5 million

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.In the dominant strategy equilibrium,the payoff to Firm A is ________.
A) $1.2 million 
B) $3.0 million 
C) $3.5 million 
D) $2.5 million

Quizplus · Accepted Answer

In a dominant strategy equilibrium, each firm chooses the strategy that maximizes its payoff regardless of the other firm's choice. The payoff of $3.5 million is the highest payoff for Firm A in its dominant strategy.

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