Use the following case from question
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.
-What would be the profits for Mattie's Dairy in equilibrium if Irene does enter the market?
A)5 million loss
B)5 million
C)10 million
D)20 million

Question

Use the following case from question
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
-What would be the profits for Mattie's Dairy in equilibrium if Irene does enter the market?​
A)​5 million loss
B)5 million
C)10 million
D)​20 million

Quizplus · Accepted Answer

If Irene enters the market and Mattie's decides to accommodate Irene, they would share the profits equally, resulting in 5 million in profits for Mattie's Dairy in equilibrium. Fighting would result in a loss for both, so the rational choice for Mattie's is to share the market.

Use the Following Case from Question