H>> O O Shown at right is a payoff matrix for a price-cutting decision by Audi and Mazda. OA. Audi does not have a dominant strategy. OB. Audi's dominant strategy is to cut price, because $7 million is more than $6 million and $9 million is more than $5 million. OC. Mazda does not have a dominant strategy. OD. Audi's dominant strategy is to not cut price, because $9 million is more than $7 million. O E. Mazda's dominant strategy is to cut price, because $8 million is greater than $6 million and $10 million is greater than $7 million. Payoff Matrix for Price Cutting Decisions Don't Cut Price --- Mazda --- Cut Price Don't Cut Price --- - Audi --- Cut Price $6 million $5 million $6 million $8 million $7 million $9 million $7 million $10 million
H>> O O Shown at right is a payoff matrix for a price-cutting decision by Audi and Mazda. OA. Audi does not have a dominant strategy. OB. Audi's dominant strategy is to cut price, because $7 million is more than $6 million and $9 million is more than $5 million. OC. Mazda does not have a dominant strategy. OD. Audi's dominant strategy is to not cut price, because $9 million is more than $7 million. O E. Mazda's dominant strategy is to cut price, because $8 million is greater than $6 million and $10 million is greater than $7 million. Payoff Matrix for Price Cutting Decisions Don't Cut Price --- Mazda --- Cut Price Don't Cut Price --- - Audi --- Cut Price $6 million $5 million $6 million $8 million $7 million $9 million $7 million $10 million
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:H>>
O
O
Shown at right is a payoff matrix for a price-cutting decision
by Audi and Mazda.
OA. Audi does not have a dominant strategy.
OB. Audi's dominant strategy is to cut price, because $7
million is more than $6 million and $9 million is more
than $5 million.
OC. Mazda does not have a dominant strategy.
OD. Audi's dominant strategy is to not cut price,
because $9 million is more than $7 million.
O E. Mazda's dominant strategy is to cut price,
because $8 million is greater than $6 million
and $10 million is greater than $7 million.
Payoff Matrix for Price Cutting Decisions
Don't Cut Price
--- Mazda
--- Cut Price
Don't Cut Price
---
- Audi --- Cut Price
$6 million
$5 million
$6 million
$8 million
$7 million
$9 million
$7 million
$10 million
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