The table below shows the payoff (profit)matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms). Table 25.2 According to Table 25.2, if firm A follows its dominant strategy but firm B does not, firm A earns a profit of:

Question

The table below shows the payoff (profit)matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms). Table 25.2  According to Table 25.2, if firm A follows its dominant strategy but firm B does not, firm A earns a profit of:

Quizplus · Accepted Answer

Firm A's dominant strategy is to price at $500, regardless of what Firm B does. Therefore, if Firm B prices at $200, A will earn a profit of $60 (since B's dominant strategy is to price at $200 and A's corresponding profit is $60).

The Table Below Shows the Payoff (Profit)matrix of Firm a and Firm