The following table depicts two firms in a single-stage duopoly game. Each firm makes its decision without knowledge of the other firm’s decision. The payoffs for each firm represent economic profits, and each firm strictly prefers more economic profit than less. If X is greater than $3,500, then there is/are: ### Payoff Matrix: - **Tasha’s Flower Shop** - **Produce 300 flowers** - Joshua's Flower Shop (Produce 200 flowers): $2,500 - Joshua's Flower Shop (Produce 300 flowers): $1,000 - **Produce 200 flowers** - Joshua's Flower Shop (Produce 200 flowers): $3,500 - Joshua's Flower Shop (Produce 300 flowers): X - **Joshua’s Flower Shop** - **Produce 200 flowers** - Tasha's Flower Shop (Produce 300 flowers): $2,500 - Tasha's Flower Shop (Produce 200 flowers): $3,500 - **Produce 300 flowers** - Tasha's Flower Shop (Produce 300 flowers): $1,000 - Tasha's Flower Shop (Produce 200 flowers): X ### Options: a. Only one Nash equilibrium, and this game would be considered a prisoner’s dilemma. b. Two Nash equilibriums, and this game would be considered a prisoner’s dilemma. c. Three Nash equilibriums, and this game would be considered a prisoner’s dilemma. d. Only one Nash equilibrium, and this game would not be considered a prisoner’s dilemma. e. Two Nash equilibriums, and this game would not be considered a prisoner’s dilemma.
The following table depicts two firms in a single-stage duopoly game. Each firm makes its decision without knowledge of the other firm’s decision. The payoffs for each firm represent economic profits, and each firm strictly prefers more economic profit than less. If X is greater than $3,500, then there is/are: ### Payoff Matrix: - **Tasha’s Flower Shop** - **Produce 300 flowers** - Joshua's Flower Shop (Produce 200 flowers): $2,500 - Joshua's Flower Shop (Produce 300 flowers): $1,000 - **Produce 200 flowers** - Joshua's Flower Shop (Produce 200 flowers): $3,500 - Joshua's Flower Shop (Produce 300 flowers): X - **Joshua’s Flower Shop** - **Produce 200 flowers** - Tasha's Flower Shop (Produce 300 flowers): $2,500 - Tasha's Flower Shop (Produce 200 flowers): $3,500 - **Produce 300 flowers** - Tasha's Flower Shop (Produce 300 flowers): $1,000 - Tasha's Flower Shop (Produce 200 flowers): X ### Options: a. Only one Nash equilibrium, and this game would be considered a prisoner’s dilemma. b. Two Nash equilibriums, and this game would be considered a prisoner’s dilemma. c. Three Nash equilibriums, and this game would be considered a prisoner’s dilemma. d. Only one Nash equilibrium, and this game would not be considered a prisoner’s dilemma. e. Two Nash equilibriums, and this game would not be considered a prisoner’s dilemma.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The following table depicts two firms in a single-stage duopoly game. Each firm makes its decision without knowledge of the other firm’s decision. The payoffs for each firm represent economic profits, and each firm strictly prefers more economic profit than less. If X is greater than $3,500, then there is/are:
### Payoff Matrix:
- **Tasha’s Flower Shop**
- **Produce 300 flowers**
- Joshua's Flower Shop (Produce 200 flowers): $2,500
- Joshua's Flower Shop (Produce 300 flowers): $1,000
- **Produce 200 flowers**
- Joshua's Flower Shop (Produce 200 flowers): $3,500
- Joshua's Flower Shop (Produce 300 flowers): X
- **Joshua’s Flower Shop**
- **Produce 200 flowers**
- Tasha's Flower Shop (Produce 300 flowers): $2,500
- Tasha's Flower Shop (Produce 200 flowers): $3,500
- **Produce 300 flowers**
- Tasha's Flower Shop (Produce 300 flowers): $1,000
- Tasha's Flower Shop (Produce 200 flowers): X
### Options:
a. Only one Nash equilibrium, and this game would be considered a prisoner’s dilemma.
b. Two Nash equilibriums, and this game would be considered a prisoner’s dilemma.
c. Three Nash equilibriums, and this game would be considered a prisoner’s dilemma.
d. Only one Nash equilibrium, and this game would not be considered a prisoner’s dilemma.
e. Two Nash equilibriums, and this game would not be considered a prisoner’s dilemma.
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