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The Accompanying Table Shows Two Firms in a Single-Stage Duopoly

Question 62

Multiple Choice

The accompanying table shows two firms in a single-stage duopoly game. Each firm makes its decision without knowledge of the other firm's decision. The payoffs for each firm represent economic profits, and each firm strictly prefers more economic profit than less. If both firms were able to write a binding contract, this contract would specify that Bobbles.com agrees to produce _________ bobbleheads and Bobbles R' Us agrees to produce _________ bobbleheads.  Bobbles R Us Bobbles.com  Produce 5,000 bobbleheads  Produce 5,000 bobbleheads  Produce 5,000bobbleheads  Produce 7,000bobbleheads $76,000$109,000$84,000$22,000$18,000$34,000$105,000$24,000\begin{array} { l }&\text { Bobbles } R^{\prime} \text { Us }\\\text {Bobbles.com }&\begin{array} { l }\quad\quad\text { Produce } 5,000 \text { bobbleheads }\quad\quad\text { Produce } 5,000 \text { bobbleheads }\\\begin{array} { l } \text { Produce} \\ \text { 5,000} \\ \text {bobbleheads } \\\\ \text { Produce} \\ \text { 7,000} \\ \text {bobbleheads } \\\end{array}\begin{array}{|l|l|}\hline \$76,000\quad\quad\quad&\$109,000\quad\quad\quad \\\\\$84,000&\$22,000\\\hline \$18,000&\$34,000\\\\\$105,000&\$24,000 \\\\\hline\end{array}\end{array}\end{array}


A) 5,000; 7,000
B) 7,000; 5,000
C) 7,000; 7,000
D) 5,000; 5,000
E) 12,000; 0

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