Refer to the above payoff matrix. Assume that Initially, both firms are operatin

Question

Refer to the above payoff matrix. Assume that Initially, both firms are operating from a high priced strategy position. When Ainsley adopts a low-price strategy. Deegan decides to maintain the high price strategy. Ainsley will, A. Gam $4 million in profit and Deegan will lose $4 million in profit. B Gain $6 million in profit and Deegan will lose $6 million in profit C Lose $2,000,000 in profit and Deegan will lose $4 million in profit. D. Lose $4 million in profit and Deegan will gain $6 million in profit. 45. If a firm is employing the variable resources of Labor and Capital in an imperfectly competitive markets. It will maximize profits by employing Labor and Capital in such quantities that A. MRP_L/MRC_c = MRP_c/MRC_L. B MRP_L/MRC_L = MRP_c/MRC_c = 1. C. MRP_L/P_L = MRP_c/P_c = 1. D MRP_L = MRP_C - 1. 46. The basic purpose of antitrust laws is to A Achieve subsidies for the American automobile industry B Control prices to protect the consumer C. Enforce laws that restrict competition D. Limit monopoly pow r in an industry

Explanation / Answer

44. B Gains 6 Million in Profit and Deegan loss 6 million

45   C MRPl/Pl = MRPc/Pc = 1

46. B. Control Prices to protect consumers.

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