Refer to the following game. $\begin{array}{l}
\quad\quad\quad\quad\quad\text { Firm B }\
\text { Firm A}
\begin{array}{|l|l|l|}
\hline & \text {Low Price } & \text { High Price } \
\hline \text {Low Price } & (10,9) & (15,8) \
\hline \text { High Price } & (-10,7) & (11,11) \
\hline
\end{array}\end{array}$ Which of the following is true?
A) A dominant strategy for firm A is "high price."
B) There does not exist a dominant strategy for firm A.
C) A dominant strategy for firm B is "low price."
D) None of the preceding answers is correct.

Question

Refer to the following game. $\begin{array}{l}
\quad\quad\quad\quad\quad\text { Firm B }\
\text { Firm A}
\begin{array}{|l|l|l|}
\hline & \text {Low   Price } & \text { High Price } \
\hline \text {Low  Price } & (10,9) & (15,8) \
\hline \text { High  Price } & (-10,7) & (11,11) \
\hline
\end{array}\end{array}$ Which of the following is true?
A) A dominant strategy for firm A is "high price."
B) There does not exist a dominant strategy for firm A.
C) A dominant strategy for firm B is "low price."
D) None of the preceding answers is correct.

Quizplus · Accepted Answer

There is no dominant strategy for either firm A or B. A dominant strategy is a strategy that is the best choice for a player regardless of what their opponent chooses. In this game, whether firm A chooses a low or high price, the best choice for firm B depends on what A chooses. Similarly, whether firm B chooses a low or high price, the best choice for firm A depends on what B chooses. Therefore, there is no dominant strategy for either firm.

Refer to the Following Game Which of the Following Is True? A) a Dominant Strategy

Refer to the Following Game Which of the Following Is True?
A) a Dominant Strategy