Question: Table A shows the pricing options for two drone operators, Andrew and Jasmine, as an oligopoly in a local market. Which of the following pricing
Table A shows the pricing options for two drone operators, Andrew and Jasmine, as an oligopoly in a local market. Which of the following pricing strategy scenarios does Table 2 depict, when there are at least two pricing periods expected?
| Table A | Drone Operator Andrew LOW Price | Drone Operator Andrew HIGH Price |
| Drone Operator Jasmine LOW Price | Drone Operator Andrew Charges LOW Price: gets $1,000 profit
Drone Operator Jasmine Charges LOW Price: gets $1,000 profit | Drone Operator Andrew Charges HIGH Price: gets $0 profit
Drone Operator Jasmine Charges LOW Price: gets $2,000 profit |
| Drone Operator Jasmine HIGH Price | Drone Operator Andrew Charges LOW Price: gets $2,000 profit
Drone Operator Jasmine Charges HIGH Price: gets $0 profit | Drone Operator Andrew Charges HIGH Price: gets $1,500 profit
Drone Operator Jasmine Charges HIGH Price: gets $1,500 profit |
Table 2 Pricing Strategy Scenario
| TABLE 2 | First Period Price Choice (High or Low) | First Period Profit | Second Period Price Choice (High or Low) | Second Period Profit | Total Profit for both periods |
| Andrew | Low | $1,000 | Low | $1,000 | $2,000 |
| Jasmine | Low | $1,000 | Low | $1,000 | $2,000 |
a. Andrew plays Tit-for-Tat and Jasmine plays Tit-for-Tat.
b. Andrew plays Tit-for-Tat and Jasmine "cheats."
c. Jasmine "cheats" and Andrew "cheats."
d. Jasmine plays Tit-for-Tat and Andrew "cheats."
e. Expecting only one pricing period, Jasmine chooses the Nash Non-cooperative Equilibrium price strategy.
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