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Refer to the Normal-Form Game of Price Competition in the Payoff

Question 98

Multiple Choice

Refer to the normal-form game of price competition in the payoff matrix below.  Firm B  Firm A Low Price  High Price  Low Price 0,050,10 High Price 10,5020,20\begin{array}{c}\text { Firm B }\\\text { Firm A}\begin{array}{|l|l|l|} \hline & \text { Low Price } & \text { High Price } \\\hline & & \\\text { Low Price } & 0,0 & 50,-10 \\\hline & & \\\text { High Price } & -10,50 & 20,20\\\hline\end{array}\end{array} What is the maximum interest rate that can sustain collusion?


A) 30 percent
B) 15 percent
C) 66.7 percent
D) 20 percent

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