Table 17-17
This table shows a game played between two firms, Firm A and Firm B. In this game each firm must decide how much output (Q) to produce: 2 units or 3 units. The profit for each firm is given in the table as (Profit for Firm A, Profit for Firm B).
-Refer to Table 17-17. In this game,
A)neither player has a dominant strategy.
B)both players have a dominant strategy.
C)Firm A has a dominant strategy, but Firm B does not have a dominant strategy.
D)Firm B has a dominant strategy, but Firm A does not have a dominant strategy.

Question

Table 17-17
This table shows a game played between two firms, Firm A and Firm B. In this game each firm must decide how much output (Q) to produce: 2 units or 3 units. The profit for each firm is given in the table as (Profit for Firm A, Profit for Firm B). 
-Refer to Table 17-17. In this game,
A)neither player has a dominant strategy. 
B)both players have a dominant strategy. 
C)Firm A has a dominant strategy, but Firm B does not have a dominant strategy. 
D)Firm B has a dominant strategy, but Firm A does not have a dominant strategy.

Quizplus · Accepted Answer

Neither player has a dominant strategy because the best choice of each firm depends on the choice of the other firm. For example, if Firm A decides to produce 3 units, the best choice for Firm B is to produce 2 units because it earns a higher profit ($8 million) than if it also produces 3 units ($6 million). Similarly, if Firm B decides to produce 3 units, the best choice for Firm A is to produce 2 units because it earns a higher profit ($8 million) than if it also produces 3 units ($6 million). Therefore, the outcome of this game will depend on the strategic behavior of both firms, and there is no dominant strategy for either firm.

Table 17-17 This Table Shows a Game Played Between Two Firms, Firm