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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