Figure 17-2. Two companies, Acme and Pinnacle, each decide whether to produce a good quality product or a poor quality product. In the figure, the dollar amounts are payoffs and they represent annual profits for the two companies.
-Refer to Figure 17-2. The more frequently this game is played, the more likely it is that
A)both firms will produce a good quality product.
B)both firms will produce a poor quality product.
C)both firms experience a reduction in profits compared to the Nash equilibrium outcome.
D)one firm will experience an increase in profits and the other will experience a decrease in profits.

Question

Figure 17-2. Two companies, Acme and Pinnacle, each decide whether to produce a good quality product or a poor quality product. In the figure, the dollar amounts are payoffs and they represent annual profits for the two companies. 
-Refer to Figure 17-2. The more frequently this game is played, the more likely it is that
A)both firms will produce a good quality product. 
B)both firms will produce a poor quality product. 
C)both firms experience a reduction in profits compared to the Nash equilibrium outcome. 
D)one firm will experience an increase in profits and the other will experience a decrease in profits.

Quizplus · Accepted Answer

The Answer of Figure 17-2. Two companies, Acme and Pinnacle, each decide whether to produce a good quality product or a poor quality product. In the figure, the dollar amounts are payoffs and they represent annual profits for the two companies. 
-Refer to Figure 17-2. The more frequently this game is played, the more likely it is that
A)both firms will produce a good quality product. 
B)both firms will produce a poor quality product. 
C)both firms experience a reduction in profits compared to the Nash equilibrium outcome. 
D)one firm will experience an increase in profits and the other will experience a decrease in profits.