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Table 14-8 "W" earns $3 million Wide Awake ("W") High price Low price "W" earns $4 million High price "Z" earns "Z" earns $3 million Zuma ("Z") "W" earns $1 million $1 million "W" earns $2 million Low price "Z" earns $4 million "Z" earns $2 million Two rival oligopolists in the coffee industry, Wide Awake and Zuma, have to decide on their pricing strategy. Each can choose either a high price or a low price. Table 14-8 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts. Refer to Table 14-8. If the firms cooperate, what prices will they select? Zuma will select a low price and Wide Awake will select a high price. Both firms will select a high price. Both firms will select a low price. Zuma will select a high price and Wide Awake will select a low price.

Table 14-8 "W" earns $3 million Wide Awake ("W") High price Low price "W" earns $4 million High price "Z" earns "Z" earns $3 million Zuma ("Z") "W" earns $1 million $1 million "W" earns $2 million Low price "Z" earns $4 million "Z" earns $2 million Two rival oligopolists in the coffee industry, Wide Awake and Zuma, have to decide on their pricing strategy. Each can choose either a high price or a low price. Table 14-8 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts. Refer to Table 14-8. If the firms cooperate, what prices will they select? Zuma will select a low price and Wide Awake will select a high price. Both firms will select a high price. Both firms will select a low price. Zuma will select a high price and Wide Awake will select a low price.

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.13P
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Table 14-8 "W" earns $3 million Wide Awake ("W") High price Low price "W" earns $4 million High price "Z" earns "Z" earns $3 million Zuma ("Z") "W" earns $1 million $1 million "W" earns $2 million Low price "Z" earns $4 million "Z" earns $2 million Two rival oligopolists in the coffee industry, Wide Awake and Zuma, have to decide on their pricing strategy. Each can choose either a high price or a low price. Table 14-8 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts. Refer to Table 14-8. If the firms cooperate, what prices will they select? Zuma will select a low price and Wide Awake will select a high price. Both firms will select a high price. Both firms will select a low price. Zuma will select a high price and Wide Awake will select a low price.
Transcribed Image Text:Table 14-8 "W" earns $3 million Wide Awake ("W") High price Low price "W" earns $4 million High price "Z" earns "Z" earns $3 million Zuma ("Z") "W" earns $1 million $1 million "W" earns $2 million Low price "Z" earns $4 million "Z" earns $2 million Two rival oligopolists in the coffee industry, Wide Awake and Zuma, have to decide on their pricing strategy. Each can choose either a high price or a low price. Table 14-8 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts. Refer to Table 14-8. If the firms cooperate, what prices will they select? Zuma will select a low price and Wide Awake will select a high price. Both firms will select a high price. Both firms will select a low price. Zuma will select a high price and Wide Awake will select a low price.
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