Refer to the above payoff matrix for the profits (in $ millions) of two firms (A and B) and two pricing strategies (high and low). Which of the following is the outcome of the dominant strategy without cooperation?
A) Both firm A and firm B choose the low price.
B) Both firm A and firm B choose the high price.
C) Firm A chooses the low price while firm B chooses the high price.
D) Firm A chooses the high price while firm B chooses the low price.

Question

Refer to the above payoff matrix for the profits (in $ millions) of two firms (A and B) and two pricing strategies (high and low). Which of the following is the outcome of the dominant strategy without cooperation?
A) Both firm A and firm B choose the low price. 
B) Both firm A and firm B choose the high price. 
C) Firm A chooses the low price while firm B chooses the high price. 
D) Firm A chooses the high price while firm B chooses the low price.

Quizplus · Accepted Answer

The Answer of  Refer to the above payoff matrix for the profits (in $ millions) of two firms (A and B) and two pricing strategies (high and low). Which of the following is the outcome of the dominant strategy without cooperation?
A) Both firm A and firm B choose the low price. 
B) Both firm A and firm B choose the high price. 
C) Firm A chooses the low price while firm B chooses the high price. 
D) Firm A chooses the high price while firm B chooses the low price.

Refer to the Above Payoff Matrix for the Profits (In