Using the following payoff table for Hardaway Corporation and Paxton Industries.
ID: 1222850 • Letter: U
Question
Using the following payoff table for Hardaway Corporation and Paxton Industries. These two firms must make simultaneous pricing decisions. They can choose low, medium, or high prices. The payoffs given are in thousands of dollars of profit per month. Following the procedure of successive elimination of dominated strategies, the manager of Paxton Industries will eliminate in the first round the strategy of setting a. A low price. b. A medium price. c. A high price. d. None of the above; Paxton Industries does not have a dominated strategy. After the first round of eliminating dominated strategies for both firms, a. Hardaway Corporation has a dominant strategy, which is to price low. b Hardaway Corporation has a dominant strategy, which is to price medium. c. Paxton Industries has a dominant strategy, which is to price low. d. Paxton Industries has a dominant strategy, which is to price medium. e. both b and d. After the first round of eliminating dominated strategies for both firms, a. No more dominated strategies remain for further elimination. b. Setting a medium price for Hardaway Corporation can next be eliminated in a second round. c. Setting a high price for Hardaway Corporation can next be eliminated in a second round. d. No other dominated strategies can be eliminated for Paxton Industries. e. both c and d.Explanation / Answer
Answer :- Q1. c. a high price.
Q2. a. Hardaway Corporation has a dominant strategy, which is to price low.
Q3. e. both c and d.
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