Use the following table to answer the question : Table 15-1: payoff matrix shows the profits accruing to two firms,Company C and Company D,under different pricing strategies.In each cell,the figure on the left indicates Company C's payoff and the figure on the right indicates Company D's payoff.

-Refer to Table 15-1.If X = 145 and Y = 62,it is evident that _____.
A)both firms have a dominant strategy.
B)neither firm has a dominant strategy.
C)only company C has a dominant strategy.
D)only company D has a dominant strategy.

Question

Use the following table to answer the question : Table 15-1: payoff matrix shows the profits accruing to two firms,Company C and Company D,under different pricing strategies.In each cell,the figure on the left indicates Company C's payoff and the figure on the right indicates Company D's payoff.

-Refer to Table 15-1.If X = 145 and Y = 62,it is evident that _____.

-Refer to Table 15-1.If X = 145 and Y = 62,it is evident that _____.
A)both firms have a dominant strategy. 
B)neither firm has a dominant strategy. 
C)only company C has a dominant strategy. 
D)only company D has a dominant strategy.

Quizplus · Accepted Answer

If X=145 and Y=62, neither firm has a dominant strategy. Dominant strategy is a pricing strategy that provides the highest payoff for a player, regardless of the other player's strategy. In this case, company C has a dominant strategy (charging $200) only if company D charges $100 or $140. Similarly, company D has a dominant strategy (charging $140) only if company C charges $180 or $200. Since there is no combination of strategies where both firms have a dominant strategy, the answer is B.

Use the Following Table to Answer the Question : Table