Use the following case from question
Two ice cream trucks A&B are playing a simultaneous pricing game.If one of them prices low,he gets all the customers,a payoff of 12,while other gets zero.If both price high they each get a payoff of 6 and if both price low,they get a payoff of 5.
-What is the best response of Vendor B to Vendor A pricing high?
A)Also price high
B)Price low
C)Leave the market
D)All of the above

Question

​Use the following case from question
Two ice cream trucks A&B are playing a simultaneous pricing game.If one of them prices low,he gets all the customers,a payoff of 12,while other gets zero.If both price high they each get a payoff of 6 and if both price low,they get a payoff of 5.
-​What is the best response of Vendor B to Vendor A pricing high?
A)​Also price high
B)Price low
C)Leave the market
D)​All of the above

Quizplus · Accepted Answer

If Vendor A prices high, then Vendor B's best response would be to price low. This is because if Vendor B prices high, both vendors will receive a payoff of 6 which is lower than the payoff of 5 if both price low. Therefore, to maximize their payoff, Vendor B should choose to price low when Vendor A prices high.

​Use the Following Case from Question

Use the Following Case from Question