Below is a profit pay-off matrix for two oligopoly firms: North and South.North's profits are shown in the upper portion of each box and South's are in the lower portion.
-Refer to the information above to answer this question.If North and South have agreed through illegal collusion to both follow a low output policy,the temptation to cheat is demonstrated by which of the following?
A) The fact that North can gain if South raises output and it doesn't.
B) The fact that South can gain if North raises output and it doesn't.
C) The fact that North can gain if it raises output and South does not.
D) The fact that South can gain if it raises output and North does not.
E) Both c and d.
Correct Answer:
Verified
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