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, The Rock Shop:
A. does not have a dominant strategy.
B. has more than one dominant strategy.
C. should enter the market, regardless of what MiiTunes chooses to do.
D. should not enter the market, regardless of what MiiTunes chooses to do.
Answer: A
Economics
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