(Figure: Payoff Matrix for Blue Bottle and Opal Ocean) Use

Multiple Choice

(Figure: Payoff Matrix for Blue Bottle and Opal Ocean) Use Figure: Payoff Matrix for Blue Bottle and Opal Ocean. The figure shows the potential profits of two producers of bottled water. Each has two strategies available to it: a high price and a low price. Suppose Blue Bottle charges a high price and Opal Ocean does the same. In the next period, Blue Bottle charges a low price and Opal Ocean incurs a loss. If Opal Ocean responds with a Grim trigger strategy, it will:
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A) always charge a low price-the same as its best response.
B) make random changes in its price so that Blue Bottle is left with no systematic strategy.
C) charge a low price in the next period and thereafter charge the same price that Blue Bottle charged in the previous period.
D) always charge a high price.