Table 17-17.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 17-17.What is grocery store 2's dominant strategy?

Question

Table 17-17.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 17-17.What is grocery store 2's dominant strategy?

Quizplus · Accepted Answer

A dominant strategy is one that results in the highest payoff for a player, regardless of what the other player does. If grocery store 2 always achieves a better outcome by setting a low price, regardless of grocery store 1's actions, then setting a low price is its dominant strategy.