Chapter 13 & 14 Quiz X Chapter 13 & 14 Quiz X Course Hero C A mylab.pearson.com/Student/PlayerTest.aspx?testId=249366734 Economics 1001 - Section 5 - Online - Speicher Kyla Rose ? = Quiz: Chapter 13 & 14 Quiz Question 4 of 12 This quiz: 15 point(s) possible This question: 2 point(s) possible Submit quiz Question list K Consider a Caribbean cruise route served by two cruise lines, Carnival and Royal Caribbean. Both lines must choose whether to charge a high price ($280) or a low price ($270) to vacationers. These price strategies with corresponding profits are illustrated in the payoff matrix to the O Question 1 right. Carnival's profits are in red and Royal Caribbean's are in blue. Carnival Suppose the cruise lines decide to collude. At which outcome are joint profits maximized? Price = $280 Price = $270 O Question 2 Joint profits are maximized when Carnival picks and Royal Caribbean picks $9,000 $1,620 Price = $280 $9,000 $15,640 O Question 3 Is this outcome a Nash equilibrium? Royal The cooperative equilibrium $15,640 $8,840 Price = $270 O Question 4 O A. is not a Nash equilibrium because the game does not have an equilibrium. $1,620 $8,840 O B. is a Nash equilibrium because joint profits are maximized O C. is not a Nash equilibrium because Carnival can increase its profit by picking the O Question 5 low price. O D. is not a Nash equilibrium because both cruise lines can increase profits by picking the low price O Question 6 .... Next M 31 O Apr 6 7:11 3Chapter 13 & 14 Quiz X Chapter 13 & 14 Quiz X Course Hero C A mylab.pearson.com/Student/PlayerTest.aspx?testId=249366734 Economics 1001 - Section 5 - Online - Speicher Kyla Rose ? = Quiz: Chapter 13 & 14 Quiz Question 4 of 12 This quiz: 15 point(s) possible This question: 2 point(s) possible Submit quiz DZ/U) to vacationers. Question list K These price strategies with corresponding profits are illustrated in the payoff matrix to the right. Carnival's profits are in red and Royal Caribbean's are in blue. Suppose the cruise lines decide to collude. At which outcome are joint profits maximized? O Question 1 Joint profits are maximized when Carnival picks and Royal Caribbean picks Carnival Price = $280 Price = $270 O Question 2 Is this outcome a Nash equilibrium? $9,000 $1,620 Price = $280 The cooperative equilibrium $9,000 $15,640 O Question 3 Royal O A. is not a Nash equilibrium because the game does not have an equilibrium. $15,640 $8,840 O B. is a Nash equilibrium because joint profits are maximized. Price = $270 O Question 4 O C. is not a Nash equilibrium because Carnival can increase its profit by picking the $1,620 $8,840 low price. O D. is not a Nash equilibrium because both cruise lines can increase profits by picking O Question 5 the low price. O E. is not a Nash equilibrium because Royal Caribbean can increase its profit by picking the low price. O Question 6 Next M O Apr 6 7:12 4 9