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BigBax and CheapStore are the only two firms in a market Each firm must decide whether to price high or price low The payoffs from each strategy combination are shown to the right-in millions of

BigBax and CheapStore are the only two firms in a market. Each firm must decide whether to price high or price low. The payoffs from each strategy combination are shown to the right-in millions of dollars. The first number in each pair is BigBox's profit, the second is CheapStore's profit Price Low Price High-.. Cheap Store $400 $600 For BigBox, the dominant strategy in this game is to This is the dominant strategy because t is the strategy that will resuit in BigBox receiving the highest possible profit, $600 O A. $400 0 B, it is the only action that an olgopolist would ever take. $20 $80 O c. tis the stralagy that will allow the frms to cooperate and receive the highest total profit it is the best action for BigBox, no matter what CheapStore does O D. $600 $80

Apr 02 2020 View more View Less

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