Use the following to answer question:
Figure: Pricing Strategy in Cable TV Market II
-(Figure: Pricing Strategy in Cable TV Market II)Use Figure: Pricing Strategy in Cable TV Market II.The dominant strategy for CableNorth:
A)is to charge a high price.
B)is to charge a low price.
C)is to charge what CableSouth does.
D)does not exist.

Question

Use the following to answer question:
Figure: Pricing Strategy in Cable TV Market II 
-(Figure: Pricing Strategy in Cable TV Market II)Use Figure: Pricing Strategy in Cable TV Market II.The dominant strategy for CableNorth:
A)is to charge a high price. 
B)is to charge a low price. 
C)is to charge what CableSouth does. 
D)does not exist.

Quizplus · Accepted Answer

The dominant strategy for CableNorth is to charge a low price, as this strategy results in a higher profit for CableNorth regardless of what CableSouth does. This is because if CableSouth also charges a low price, CableNorth still earns a higher profit than if they both charged a high price. If CableSouth charges a high price, CableNorth still earns a higher profit than if they both charged a high price. Therefore, charging a low price is the best strategy for CableNorth.

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