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The Following Depicts a Normal-Form Game of Price Competition What Is the Maximum Interest Rate That Can Sustain Collusion

Question 108

Multiple Choice

The following depicts a normal-form game of price competition.  Firm B Firm A Low Price  High Price  Low Price 0,025,5 High Price 5,2510,10\begin{array}{l}\quad\quad\quad\quad\quad\quad\text { Firm B}\\\text { Firm A}\begin{array}{|l|l|l|} \hline &\text { Low Price } & \text { High Price }\\\hline & & \\\text { Low Price } & 0,0 & 25,-5 \\\hline & & \\\text { High Price } & -5,25 & 10,10 \\\hline\end{array}\end{array} What is the maximum interest rate that can sustain collusion?


A) 66.7 percent
B) 33 percent
C) 25 percent
D) 15 percent

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