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Scenario: Payoff Matrix for Firms X and Y
The following payoff matrix depicts the profits for the only two firms in this oligopolistic industry.
-(Scenario: Payoff Matrix for Firms X and Y)Payoff Matrix for Firms X and Y.If firm X were to choose its dominant strategy,it would:

Question

Use the following to answer questions :
Scenario: Payoff Matrix for Firms X and Y
The following payoff matrix depicts the profits for the only two firms in this oligopolistic industry. 
-(Scenario: Payoff Matrix for Firms X and Y)Payoff Matrix for Firms X and Y.If firm X were to choose its dominant strategy,it would:

Quizplus · Accepted Answer

Firm X's dominant strategy is to choose a high price, as this leads to a higher profit for Firm X regardless of what Firm Y does. Choosing a low price would lead to a lower profit for Firm X if Firm Y also chooses a low price, and Firm Y may choose a high price in response to Firm X's low price, leading to lower profits for Firm X. Choosing a high price is the best strategy for Firm X.

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