15. Refer to the figure below. Column Cruises Keep rates high Offer reduced rate

Question

15. Refer to the figure below. Column Cruises Keep rates high Offer reduced rates Offer reduced 50 for Row 500 for Row rates 50 for Column 10 for Column Row Resorts Keep rates 10 for Row 300 for Row high 500 for Column 300 for Column When Row Resorts and Column Cruises both play their dominant strategy Oboth firms do better than if they had both played their dominated strategy ORow Resorts earns a higher profit than does Column Cruises Oboth firms do worse than if they had both played their dominated strategy Column Cruises earns a higher profit than does Row Resorts

Explanation / Answer

DOMINANT STRATEGY IS THE ONE THAT THE ECONOMIC PLAYER OPTS FOR IRRESPECTIVE OF WHAT THE OTHER PLAYER IS OPTING FOR,

SO HERE SUCH STRATEGY IS WHEN BOTH PLAYER CHARGERS LOWER RATES,

BUT IF WE SEE THEIR MUTUAL BEST IT IS WHEN BOTH PLAYER PLAYS HIGH RATES

SO ANSWER IS C

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