Consider the following payoff matrix for a game in which two firms attempt to collude under the Bertrand model:
Firm B cuts Firm B colludes
Firm A cuts 6,6 24,8
Firm A colludes 8,24 12,12
Here, the possible options are to retain the collusive price (collude) or to lower the price in attempt to increase the firm's market share (cut). The payoffs are stated in terms of millions of dollars of profits earned per year. What is the Nash equilibrium for this game?
A) Both firms cut prices.
B) Both firms collude.
C) There are two Nash equilibria: A cuts and B colludes, and A colludes and B cuts.
D) There are no Nash equilibria in this game.
C
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Two nations that did not fully recover from the 1992 crisis and are not members of the Eurozone as of 2016 are:
A) France and Germany. B) Britain and Sweden. C) Italy and Greece. D) Spain and Portugal.
One major feature of the economic perspective is:
A. that costs are more important than benefits. B. that scarcity is more important than choice. C. the idea that the economy has unproductive resources. D. the assumption of purposeful behavior by individuals.