The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU) .The owners of the two firms decide to fix the price of bagels.The table shows the total profits the firms will earn if they abide by the price setting agreement or if they cheat on the agreement.
Refer to the figure above.For Bagel World,__________ is its __________.
A) abiding by the agreement;dominant strategy
B) cheating on the agreement;dominated strategy
C) cheating on the agreement;dominant strategy
D) abiding by the agreement;dominant strategy when Bagels'R'Us also abides
Correct Answer:
Verified
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