Table 16-16 Consider a Small Town That Has Two Grocery Stores from Stores

Table 16-16
Consider a small town that has two grocery stores from which residents can choose to buy a gallon of milk. The store owners each must make a decision to set a high milk price or a low milk price. The payoff table, showing profit per week, is provided below. The profit in each cell is shown as (Store 1, Store 2) .

-Refer to Table 16-16.What is grocery store 1's dominant strategy?

A) Grocery store 1 does not have a dominant strategy.
B) Grocery store 1 should always set a low price.
C) Grocery store 1 should always set a high price.
D) Grocery store 1 should set a low price when grocery store 2 sets a low price, and grocery store 1 should set a high price when grocery store 2 sets a high price.

Correct Answer:

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