Which one of the following statements about the Bertrand model is incorrect?   A. The strategic variables of the game are the prices.   B. With homogeneous product and identical constant marginal cost among the firms, the Nash equilibrium outcome is referred to as the "Bertrand paradox".   C. The Bertrand model and its predictions differ from the Cournot model in important ways.   D. One of the above is incorrect.

True or false: "Game theory provides insight into decision-making by companies when company A’s decision is not affected by Company B’s decision."

The payoff matrix in the figure to the right shows the payoffs for a pricing game. If you were firm A, which strategy would you choose? Firm A should A. price high because this is their maximin strategy. B. price low because this is their tit-for-tat strategy. C. price high because this is their dominant strategy. D. price low because this is their dominant strategy. E. price low because this maximizes profits of both firms. Firm B's dominant strategy is to price If this game were repeated a large number of times and you were firm A and you could change your strategy, what might you do? Firm A should O A. use a tit-for-tat strategy by responding in kind to firm B's play. B. use a maximin strategy by maximizing the minimum gain that can be earned. C. use a tit-for-tat strategy by selecting a price that minimizes firm B's profits. D. use a maximin strategy by by responding in kind to firm B's play. E. use a tit-for-tat strategy by maximizing the minimum gain that can be earned. C Price…

Q:3 a,b and c