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The Accompanying Matrix Depicts Two Firms in a Single-Stage Duopoly

Question 64

Multiple Choice

The accompanying matrix depicts 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 X is greater than $3,500, then:  Tasha’s Flower Shop  JOUSHUA’S Flower Shop  Produce 3,000mattresses  Produce 4,000 mattresses Produce200flowers  Produce 300flowers $2,500$3,500$2,500$10,000$1,000X$3,500X\begin{array} { l }&\text { Tasha's Flower Shop }\\\text { JOUSHUA'S Flower Shop }&\begin{array} { l }\quad\quad\text { Produce } 3,000 \text {mattresses }\quad\text { Produce } 4,000 \text { mattresses}\\\begin{array} { l } \text { Produce} \\ \text {200} \\ \text {flowers } \\\\ \text { Produce} \\ \text { 300} \\ \text {flowers } \\\end{array}\begin{array}{|l|l|}\hline \$2,500\quad\quad\quad&\$3,500\quad\quad\quad \\\\\$2,500&\$10,000\\\hline \$1,000&X\\\\\$3,500&X \\\\\hline\end{array}\end{array}\end{array}


A) there is only one Nash equilibrium, and this game would be considered a prisoner's dilemma.
B) there are two Nash equilibria, and this game would be considered a prisoner's dilemma.
C) there are three Nash equilibria, and this game would be considered a prisoner's dilemma.
D) there is only one Nash equilibrium, and this game would not be considered a prisoner's dilemma.
E) there are two Nash equilibria, and this game would not be considered a prisoner's dilemma.

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