a) What is Quick Mart\'s dominant strategy? O A. To Collude O B. To Compete O C.

Question

a) What is Quick Mart's dominant strategy? O A. To Collude O B. To Compete O C. Quick Mart does not have a dominant strategy. Quick Mart's Strategies Collude Compete $50 M $80 M $50 M -$10 M b) What is Jiffy Mart's dominant strategy? O A. Jiffy Mart does not have a dominant strategy. O B. To Compete O C. To Collude Jiffy Mart's Strategies Compete Collude $O -$10 M $80 M $0 c) What is the Nash equilibrium for this game? O A. Both firms collude O B. Quick Mart competes and Jiffy Mart colludes OC. Quick Mart colludes and Jiffy Mart competes O D. Both firms compete

Explanation / Answer

Answer
a)
Option B
The dominant strategy is a strategy player plays do not change on the basis of other players strategy.
If Jiffy Mart's play collude then Quik Mart will play compete because he will get higher playoff
50<80
and
If Jiffy Mart's play compete then Quik Mart will play Compete because he will get higher playoff
-10<0

b)
Option B
If Quik Mart's play collude then Jiffy Mart will play Compete because he will get higher playoff
50<80
and
If Quik Mart's play compete then Quik Mart will play Compete because he will get higher play off
-10<0

c)
Option D
because nash equilibrium is where both players play dominant strategy

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