The following payoff matrix represents a duopoly in which the numbers indicate the profit (in thousands of dollars)for a high-price or a low-price strategy.
-Refer to the above payoff matrix.Assume that firm Y adopts a low-price strategy,while firm X maintains a high-price strategy.Compared to the results from a high-price strategy for both firms,firm Y will now ________ and firm X will ________.
A) gain $100,000 in profit;lose $150,000 in profit
B) gain $150,000 in profit;lose $100,000 in profit
C) gain $525,000 in profit;lose $275,000 in profit
D) lose $150,000 in profit;gain $150,000 in profit
E) lose $100,000 in profit;gain $100,000 in profit

Question

The following payoff matrix represents a duopoly in which the numbers indicate the profit (in thousands of dollars)for a high-price or a low-price strategy. 
-Refer to the above payoff matrix.Assume that firm Y adopts a low-price strategy,while firm X maintains a high-price strategy.Compared to the results from a high-price strategy for both firms,firm Y will now ________ and firm X will ________.
A) gain $100,000 in profit;lose $150,000 in profit 
B) gain $150,000 in profit;lose $100,000 in profit 
C) gain $525,000 in profit;lose $275,000 in profit 
D) lose $150,000 in profit;gain $150,000 in profit 
E) lose $100,000 in profit;gain $100,000 in profit

Quizplus · Accepted Answer

Firm Y will gain $100,000 in profit by adopting a low-price strategy while firm X maintains a high-price strategy, resulting in firm X losing $150,000 in profit compared to both firms adopting a high-price strategy.

The Following Payoff Matrix Represents a Duopoly in Which the Numbers