Answer the next question based on the following payoff matrix for a duopoly. The numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. Firm X? High PriceLow PriceFirm YHigh priceX = $625X = $725??Y = $625Y = $475?Low priceX = $475X = $400??Y = $725Y = $400Refer to the above payoff matrix. If both firms operate independently and do not collude, the most likely profit is:
A. $725,000 for firm X and $475,000 for firm Y.
B. $400,000 for firm X and $400,000 for firm Y.
C. $625,000 for firm X and $625,000 for firm Y.
D. $475,000 for firm X and $725,000 for firm Y.
Answer: B
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How do economies of scale contribute to the development of an oligopoly?
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The merchandise trade balance does not include
a. exports of refrigerators b. imports of automobiles c. exports of agricultural products d. shipping and insurance costs e. imports of food items with heavy tariffs