The following table shows two firms in a duopoly.Each firm makes its decision without knowledge of the other firm's decision.The payoffs for each firm represent economic profits,and each firm strictly prefers more economic profit than less.In this game,selling ________ subscriptions a month is a dominant strategy for Flixbuster and selling ________ subscriptions a month is a dominant strategy for Nextflix.

A) 200; 200
B) 200; 400
C) 400; 200
D) 400; 400
E) 100; 100

Question

The following table shows two firms in a duopoly.Each firm makes its decision without knowledge of the other firm's decision.The payoffs for each firm represent economic profits,and each firm strictly prefers more economic profit than less.In this game,selling ________ subscriptions a month is a dominant strategy for Flixbuster and selling ________ subscriptions a month is a dominant strategy for Nextflix.

A) 200; 200 
B) 200; 400 
C) 400; 200 
D) 400; 400 
E) 100; 100

Quizplus · Accepted Answer

Selling 400 subscriptions a month is a dominant strategy for both firms, as both firms earn the highest economic profit of $600,000 in this scenario. Regardless of the other firm's choice, each firm can earn $600,000 by choosing to sell 400 subscriptions a month. Therefore, this is the best choice for both firms.

The Following Table Shows Two Firms in a Duopoly