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This Figure Displays the Choices and Payoffs (Company Profits)of Two

Question 56

Multiple Choice

  This figure displays 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 make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes. According to the figure,MiiTunes: A)  has a dominant strategy to charge low prices. B)  does not have a dominant strategy. C)  has a dominant strategy to charge high prices. D)  has more than one dominant strategy. This figure displays 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 make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
According to the figure,MiiTunes:


A) has a dominant strategy to charge low prices.
B) does not have a dominant strategy.
C) has a dominant strategy to charge high prices.
D) has more than one dominant strategy.

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