The payoff matrix below is for two firms, A and B, deciding the quantity of their outputlevels. What is the dominant strategy of each firm?icroscFirm BStrategyHigh outputLow outputHigh output100, 800, 125Firm ALow output65, 040, 65Both firms produce low levels of output.DOcGillBoth firms produce high levels of output.TempFirm A's dominant strategy is to produce low levels of output, but Firm B does not havea dominant strategy.OrderArticleO Firm B's dominant strategy is to produce low levels of output, but Firm A does not have adominant strategy.Neither firm has a dominant strategy.oy 00halysis

We are going to use game theoretic approach to answer this question.

The payoff matrix below is for two firms, A and B, deciding the quantity of their output levels. What is the dominant strategy of each firm? Firm B Strategy High output Low output High output 100, 80 0, 125 Firm A Low output 65, 0 40, 65 Both firms produce low levels of output. Both firms produce high levels of output. Firm A's dominant strategy is to produce low levels of output, but Firm B does not have a dominant strategy. Firm B's dominant strategy is to produce low levels of output, but Firm A does not have a dominant strategy. Neither firm has a dominant strategy.

The payoff matrix below is for two firms, A and B, deciding the quantity of their output levels. What is the dominant strategy of each firm? Firm B Strategy High output Low output High output 100, 80 0, 125 Firm A Low output 65, 0 40, 65 Both firms produce low levels of output. Both firms produce high levels of output. Firm A's dominant strategy is to produce low levels of output, but Firm B does not have a dominant strategy. Firm B's dominant strategy is to produce low levels of output, but Firm A does not have a dominant strategy. Neither firm has a dominant strategy.

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 5PA

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