Answer the next question based on the following payoff matrix for a duopoly.The numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy
Refer to the above payoff matrix.Assume that firm Y adopts a low-price strategy while firm X maintains a high-price strategy.Compared to the results from a high-price strategy for both firms,firm Y will now:
A) gain $100,000 in profit and firm X will lose $150,000 in profit.
B) gain $150,000 in profit and firm X will lose $100,000 in profit.
C) gain $525,000 in profit and firm X will lose $275,000 in profit.
D) lose $150,000 in profit and firm X will gain $150,000 in profit.
Correct Answer:
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