Use the following to answer question:
Figure: Payoff Matrix for Jake and Zoe
-(Figure: Payoff Matrix for Jake and Zoe)Use Figure: Payoff Matrix for Jake and Zoe.Jake and Zoe are the only producers of slushies in their tourist town.Every week,each decides whether to price high or price low for the following week.The figure shows the profit per week earned by their two firms.Suppose the firms each decide to price high initially and adopt a tit-for-tat strategy for the following weeks.After a few weeks,Jake's weekly profit would be _____ and Zoe's weekly profit would be _____.
A)$800;$800
B)$1,000;$1,000
C)$1,500;$200
D)$200;$1,500

Question

Use the following to answer question:
Figure: Payoff Matrix for Jake and Zoe 
-(Figure: Payoff Matrix for Jake and Zoe)Use Figure: Payoff Matrix for Jake and Zoe.Jake and Zoe are the only producers of slushies in their tourist town.Every week,each decides whether to price high or price low for the following week.The figure shows the profit per week earned by their two firms.Suppose the firms each decide to price high initially and adopt a tit-for-tat strategy for the following weeks.After a few weeks,Jake's weekly profit would be _____ and Zoe's weekly profit would be _____.
A)$800;$800 
B)$1,000;$1,000 
C)$1,500;$200 
D)$200;$1,500

Quizplus · Accepted Answer

With a tit-for-tat strategy, both firms will continue to price high if they initially start by pricing high, leading to the stable outcome where both earn $1,000 weekly.

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