Use the following table to answer the question : Table 14-1 : shows the payoffs to Firm A and Firm B if they choose to produce either high output or low output.In each cell,the figure on the left indicates Firm A's payoffs and the figure on the right indicates Firm B's payoffs.

-Refer to the payoff matrix in Table 14-1.Which of the following describes the dominant-strategy equilibrium in this game?
A)Both firms produce low output
B)Both firms produce high output
C)Firm A produces low output and Firm B produces high output
D)Firm A produces high output and Firm B produces low output

Question

Use the following table to answer the question : Table 14-1 : shows the payoffs to Firm A and Firm B if they choose to produce either high output or low output.In each cell,the figure on the left indicates Firm A's payoffs and the figure on the right indicates Firm B's payoffs.

-Refer to the payoff matrix in Table 14-1.Which of the following describes the dominant-strategy equilibrium in this game?

-Refer to the payoff matrix in Table 14-1.Which of the following describes the dominant-strategy equilibrium in this game?
A)Both firms produce low output 
B)Both firms produce high output 
C)Firm A produces low output and Firm B produces high output 
D)Firm A produces high output and Firm B produces low output

Quizplus · Accepted Answer

In a dominant-strategy equilibrium, each player's dominant strategy results in the best outcome for that player, regardless of the other player's strategy. In this case, both firms have a dominant strategy to produce high output, as they both have a higher payoff from producing high output regardless of what the other firm does. Therefore, the dominant-strategy equilibrium in this game is for both firms to produce high output.

Use the Following Table to Answer the Question : Table