Suppose there are 2 players in a non-cooperative game theory situation. Company ABC and Company JKL both
Question:
Suppose there are 2 players in a non-cooperative game theory situation. Company ABC and Company JKL both sell books and can choose to charge a high price or a low price for a particular book that is very popular. The following matrix contains the payoffs that each company receives under 4 scenarios. The first number in each cell refers to the payoffs for Company X.
Company JKL | |||
Company ABC | Low Price | High Price | |
Low Price | 500, 400 | 400, 500 | |
High Price | 100, 0 | 50, 100 |
If both firms make their decisions simultaneously, the Nash equilibrium will be
A. | Company ABC would charge a Low Price and Company JKL would charge a High Price | |
B. | Company ABC would charge a High Price and Company JKL would charge a High Price | |
C. | Company ABC would charge a High Price and Company JKL would charge a Low Price | |
D. | Company ABC would charge a Low Price and Company JKL would charge a Low Price | |
E. | There would be no equilibrium in the game |