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 11.2 According to Table 11.2, 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 11.2  According to Table 11.2, 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 choose $500 regardless of what Firm B chooses. 
If Firm B chooses $500, Firm A's profit is $60. 
If Firm B chooses $200, Firm A's profit is $50. 
Therefore, even if Firm B does not follow its dominant strategy and chooses $200, Firm A's best choice is to still choose $500, which will result in a profit of $60.

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