Table 16-16
Consider a small town that has two grocery stores from which residents can choose to buy a gallon of milk. The store owners each must make a decision to set a high milk price or a low milk price. The payoff table, showing profit per week, is provided below. The profit in each cell is shown as (Store 1, Store 2).

-Refer to Table 16-16.If grocery store 2 sets a low price,what price should grocery store 1 set? And what will grocery store 1's payoff equal?
A)Low price, $500
B)High price, $800
C)Low price, $100
D)High price, $100

Question

Table 16-16
Consider a small town that has two grocery stores from which residents can choose to buy a gallon of milk. The store owners each must make a decision to set a high milk price or a low milk price. The payoff table, showing profit per week, is provided below. The profit in each cell is shown as (Store 1, Store 2).
 
-Refer to Table 16-16.If grocery store 2 sets a low price,what price should grocery store 1 set? And what will grocery store 1's payoff equal?
A)Low price, $500 
B)High price, $800 
C)Low price, $100 
D)High price, $100

Quizplus · Accepted Answer

If grocery store 2 sets a low price, grocery store 1 should also set a low price to remain competitive, resulting in a payoff of $500.

Table 16-16 Consider a Small Town That Has Two Grocery Stores from Stores