This payoff matrix represents the choices of two large universities in the Dallas area. The numbers represent profits and the first number is TCU and is in purple, the second number is SMU and is in red. SMU Raise tuiton Don'traise tuiton Raise tuiton 10, 10 12, 9 C U Don'traise tuiton 9, 11 7, 7 If the President of SMU promised not to raise tuition, what would TCU most likely do in response? raise tuition because the demand is inelastic appeal to anti-trust regulators to break a collusive agreement be nice to their students and keep tuition low only raise tuition if SMU breaks their promise not to raise tuition
This payoff matrix represents the choices of two large universities in the Dallas area. The numbers represent profits and the first number is TCU and is in purple, the second number is SMU and is in red. SMU Raise tuiton Don'traise tuiton Raise tuiton 10, 10 12, 9 C U Don'traise tuiton 9, 11 7, 7 If the President of SMU promised not to raise tuition, what would TCU most likely do in response? raise tuition because the demand is inelastic appeal to anti-trust regulators to break a collusive agreement be nice to their students and keep tuition low only raise tuition if SMU breaks their promise not to raise tuition
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:This payoff matrix represents the choices of two large universities in the Dallas area.
The numbers represent profits and the first number is TCU and is in purple, the
second number is SMU and is in red.
SMU
Raise tuiton
Don'traise tuiton
Raise tukon 10, 10 12, 9
C
U
Don'traise tuiton 9, 11
| 7, 7
If the President of SMU promised not to raise tuition, what would TCU most likely do
in response?
raise tuition because the demand is inelastic
appeal to anti-trust regulators to break a collusive agreement
be nice to their students and keep tuition low
only raise tuition if SMU breaks their promise not to raise tuition
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