Table 17-18
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: 10 units or 12 units. The profit for each firm is given in the table as (Profit for Firm A, Profit for Firm B).
-Refer to Table 17-18. The dominant strategy For Firm A is to produce
A)10 units and the dominant strategy for Firm B is to produce 10 units.
B)10 units and the dominant strategy for Firm B is to produce 12 units.
C)12 units and the dominant strategy for Firm B is to produce 10 units.
D)12 units and the dominant strategy for Firm B is to produce 12 units.

Question

Table 17-18
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: 10 units or 12 units. The profit for each firm is given in the table as (Profit for Firm A, Profit for Firm B). 
-Refer to Table 17-18. The dominant strategy For Firm A is to produce
A)10 units and the dominant strategy for Firm B is to produce 10 units. 
B)10 units and the dominant strategy for Firm B is to produce 12 units. 
C)12 units and the dominant strategy for Firm B is to produce 10 units. 
D)12 units and the dominant strategy for Firm B is to produce 12 units.

Quizplus · Accepted Answer

Firm A's dominant strategy is to produce 12 units because it results in higher profit regardless of what Firm B chooses (profit of 36 > profit of 24). Firm B's dominant strategy is also to produce 12 units because it results in higher profit regardless of what Firm A chooses (profit of 36 > profit of 28). Therefore, the best choice for both firms is to produce 12 units.

Table 17-18 This Table Shows a Game Played Between Two Firms, Firm