A) positive externality resulting from network complementarities. B) negative externality resulting from indirect network externalities. C) positive externality resulting from congestion beyond the infrastructure capacity. D) negative externality resulting from congestion beyond the infrastructure capacity. A) positive externality resulting from network complementarities. B) negative externality resulting from indirect network externalities. C) positive externality resulting from congestion beyond the infrastructure capacity. D) negative externality resulting from congestion beyond the infrastructure capacity.

Refer to the following payoff matrix: $\begin{array}{r} \text { Player } 2\\ \text { Player } 1 \begin{array}{|l|l|l|} \hline& \text { a} & \text { b} \\ \hline & & \\ \text { A } Q & \$ 50, \$ 5 & \$ 15, \$ 30 \\ \hline & & \\ \text { B } Q & \$ 40, \$ 2 & \$ 2, \$ 1\\ \hline \end{array} \end{array}$ The Nash equilibrium for the simultaneous-move game depicted in the payoff matrix is:

A) {(A,a) and (A,b)}. B) {(A,a)}. C) {B,b)}. D) There is no pure strategy Nash equilibrium to this game. A) {(A,a) and (A,b)}. B) {(A,a)}. C) {B,b)}. D) There is no pure strategy Nash equilibrium to this game.

A) a strategy whereby a firm temporarily prices below its marginal costs to drive competitors out of the market. B) a strategy used by a vertically integrated firm to raise rivals' costs of inputs, while holding constant final product prices. C) a strategy whereby an incumbent maintains a price below the monopoly price in order to prevent entry. D) the act of charging a low price initially upon entering a market to gain market share. A) a strategy whereby a firm temporarily prices below its marginal costs to drive competitors out of the market. B) a strategy used by a vertically integrated firm to raise rivals' costs of inputs, while holding constant final product prices. C) a strategy whereby an incumbent maintains a price below the monopoly price in order to prevent entry. D) the act of charging a low price initially upon entering a market to gain market share.

Refer to the following payoff matrix: $\begin{array}{r} \text { Player } 2\\ \text { Player } 1 \begin{array}{|l|l|l|} \hline& \text { Low } Q & \text { High } Q \\ \hline & & \\ \text { Low } Q & \$ 50, \$ 5 & \$ 15, \$ 30 \\ \hline & & \\ \text { High } Q & \$ 40, \$ 2 & \$ 2, \$ 1\\ \hline \end{array} \end{array}$ Suppose the production game depicted in the payoff matrix is a sequential-move game.Identify the strategy leading to a first-mover advantage for player 1.

A) Player 1 moves first and plays High Q. Observing player 1's move, player 2's best response is to play Low Q. B) Player 1 moves first and plays Low Q. Observing player 1's move, player 2's best response is to play Low Q. C) Player 1 moves first and plays High Q. Observing player 1's move, player 2's best response is to play High Q. D) Player 1 moves first and plays Low Q. Observing player 1's move, player 2's best response is to play High Q. A) Player 1 moves first and plays High Q. Observing player 1's move, player 2's best response is to play Low Q. B) Player 1 moves first and plays Low Q. Observing player 1's move, player 2's best response is to play Low Q. C) Player 1 moves first and plays High Q. Observing player 1's move, player 2's best response is to play High Q. D) Player 1 moves first and plays Low Q. Observing player 1's move, player 2's best response is to play High Q.