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The Figure Shown Represents the Choices and Payoffs (Company Profits)of

Question 58

Multiple Choice

  The figure shown represents the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to compete at these prices. The Rock Shop is trying to decide whether or not it should enter the market.According to the figure, The Rock Shop: A) should enter the market, regardless of what MiiTunes chooses to do. B) should not enter the market, regardless of what MiiTunes chooses to do. C) does not have a dominant strategy. D) has more than one dominant strategy. The figure shown represents the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to compete at these prices. The Rock Shop is trying to decide whether or not it should enter the market.According to the figure, The Rock Shop:


A) should enter the market, regardless of what MiiTunes chooses to do.
B) should not enter the market, regardless of what MiiTunes chooses to do.
C) does not have a dominant strategy.
D) has more than one dominant strategy.

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