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The Following Matrix Shows the Pricing Strategies and Resultant Profits

Question 11

Multiple Choice

The following matrix shows the pricing strategies and resultant profits (in thousands of dollars) for two profit-maximizing firms.
Table 9-1
 Firm B Firm A High  Low  High price 35,3521,41 Low price 37,2130,30\begin{array} {c}\quad\quad \text { Firm B} \\\begin{array}{ | c | c | c | } \hline \text { Firm } \mathrm { A } & \text { High } & \text { Low } \\\hline \text { High price } & 35,35 & 21,41 \\\hline \text { Low price } & 37,21 & 30,30 \\\hline\end{array} \end{array}
-Refer to Table 9-1. If Firm B sets a high price, Firm A will:


A) earn a profit equal to $41,000.
B) earn a profit equal to $35,000.
C) earn a higher profit than Firm B.
D) earn the same profit as firm F which is equal to $30,000.
E) follow the low-price strategy.

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