12.3 Simultaneous Decision Making and the Payoff Matrix

-Refer to Figure 12.7.The numerical data show daily profits for each of the two firms when they choose a specific pricing strategy.If Zeta commits to charging a high price,Omega can earn the largest profit by

Question

12.3 Simultaneous Decision Making and the Payoff Matrix
 
-Refer to Figure 12.7.The numerical data show daily profits for each of the two firms when they choose a specific pricing strategy.If Zeta commits to charging a high price,Omega can earn the largest profit by

Quizplus · Accepted Answer

If Zeta commits to charging a high price, Omega can earn the largest profit by charging a low price, as it will capture the majority of the market share from customers who find Zeta's price too high. This will result in a higher profit for Omega, as shown in the payoff matrix.