If Best Lights and Bright Lights are competing in a duopoly and it is always best for Best Lights to charge a price of $4 regardless of the price Bright Lights charges, then charging $4 is ________for Best Lights.
A)a dominant and pure strategy
B)neither a dominant nor pure strategy
C)a dominant, but not pure strategy
D)a pure, but not dominant strategy

Question

Quizplus · Accepted Answer

If it is always best for Best Lights to charge a price of $4 regardless of the price Bright Lights charges, then $4 is both a dominant and pure strategy for Best Lights. A dominant strategy is one that is optimal for a player regardless of the strategies chosen by the other player, and a pure strategy is one in which the player chooses a specific action with certainty. Therefore, Best Lights should always charge $4 no matter what strategy Bright Lights chooses.

If Best Lights and Bright Lights Are Competing in a Duopoly