Use the following to answer question:
-(Table: Two Rival Gas Stations)Use Table: Two Rival Gas Stations.The table shows a payoff matrix for two gas stations in a small town.Each firm can set either a high price or a low price,and customers view these two firms as nearly perfect substitutes.Profits in each cell of the payoff matrix are given as (Swifty's profit,Speedy's profit).Which statement describes a dominant strategy?
A)Swifty will always set a low price,no matter Speedy's choice.
B)Swifty will always set a high price,no matter Speedy's choice.
C)Swifty will set a low price when Speedy sets a high price,but Swifty will set a high price when Speedy sets a low price.
D)Swifty will set a high price when Speedy sets a high price,but Swifty will set a low price when Speedy sets a low price.

Question

Use the following to answer question: 
-(Table: Two Rival Gas Stations)Use Table: Two Rival Gas Stations.The table shows a payoff matrix for two gas stations in a small town.Each firm can set either a high price or a low price,and customers view these two firms as nearly perfect substitutes.Profits in each cell of the payoff matrix are given as (Swifty's profit,Speedy's profit).Which statement describes a dominant strategy?
A)Swifty will always set a low price,no matter Speedy's choice. 
B)Swifty will always set a high price,no matter Speedy's choice. 
C)Swifty will set a low price when Speedy sets a high price,but Swifty will set a high price when Speedy sets a low price. 
D)Swifty will set a high price when Speedy sets a high price,but Swifty will set a low price when Speedy sets a low price.

Quizplus · Accepted Answer

A dominant strategy is one that is best for a player, regardless of what the other player does. If Swifty always sets a low price no matter Speedy's choice, it suggests that this strategy yields Swifty the highest payoff under any scenario, making it a dominant strategy.

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