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ECO3041 - Game Theory Review Qs

# ECO3041 - Game Theory Review Qs - A the two firms will be...

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Game Theory Review Questions Questions 1. Refer to the above profits-payoff table for a duopoly. If the firms are acting independently and firm X sets its price at \$6, firm Y will achieve the largest profit by selecting: A) a price higher than \$6. B) a price between \$5 and \$6. C) \$6. D) \$4. 2. Refer to the above profits-payoff table for a duopoly. If initially firms X and Y are charging \$5 and \$4 respectively:
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Unformatted text preview: A) the two firms will be maximizing joint profits. B) Y will find it advantageous to raise its price if it was certain X would not alter its price. C) X will find it advantageous to raise its price if it was certain Y would not alter its price. D) both firms would find it advantageous to collude to raise their prices by \$1 each. Answers 1. D 2. D...
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