ECON 206 (01) Fall 2017 Test:Exam2 Thi This Question: 2 pts 4 43 of 45 (44 compl
ID: 1127297 • Letter: E
Question
ECON 206 (01) Fall 2017 Test:Exam2 Thi This Question: 2 pts 4 43 of 45 (44 complebe) Jay and Boyd ane the only two producers of a new type of laundry bleach designed to dispice conventional lsundry bleach. They are trying to Sgure out how much of this new bleach to produos The table shows the payofmatrix (in doilars) for the game that Jay and Boyd must play The Nash equilibrium for this game is hat red squares 10.000 25,000 70,000 105,000 OA Jay produces 10,000 bottes and Boyd produtos 10,000 bones 0,000 B. Jey produces 2S000 boftes and Boyd produces 25,000 bottles o c. Jay produoes 10,000 bottes and Boyd produoes 25,000 bottles OD. Jay produces 25,000 botties and Boyd produces 10,000 botties E. Jay ard Boyd prodce atolal of 50,000 boties, but isi possible to know how much ofthe total each firm 0,000 90,000 Boyd's squares) produces 90,000 25.000 105,000 Cick to seect your answer
Explanation / Answer
b is the correct answer
Reason
It is a prisoner's dilemma game, here for both of them the dominant strategy is to produce the higher amount of outcome, so both produce 25000 bottles.
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