Table 17-19
Consider a small town that has two grocery stores from which residents can choose to buy a loaf of bread. The store owners each must make a decision to set a high bread price or a low bread price. The payoff table, showing profit per week, is provided below. The profit in each cell is shown as (Store 1, Store 2).
-Refer to Table 17-19. If grocery store 2 sets a low price, what price should grocery store 1 set? And what will grocery store 1's payoff equal?
A)Low price, $250
B)High price, $400
C)Low price, $50
D)High price, $50

Question

Table 17-19
Consider a small town that has two grocery stores from which residents can choose to buy a loaf of bread. The store owners each must make a decision to set a high bread price or a low bread price. The payoff table, showing profit per week, is provided below. The profit in each cell is shown as (Store 1, Store 2). 
-Refer to Table 17-19. If grocery store 2 sets a low price, what price should grocery store 1 set? And what will grocery store 1's payoff equal?
A)Low price, $250 
B)High price, $400 
C)Low price, $50 
D)High price, $50

Quizplus · Accepted Answer

If grocery store 2 sets a low price, grocery store 1 should also set a low price to remain competitive, resulting in a payoff of $250.

Table 17-19 Consider a Small Town That Has Two Grocery Stores from Stores