Two competing firms are deciding whether to enter a new market or maintain the status quo. Use the following profit matrix to respond to question 37. If these firms do not collude, the outcome will be
A.
both firms maintain the status quo.
B.
both firms enter the market.
C.
Firm X enters the market and Firm Y maintains the status quo.
D.
Firm Y enters the market and Firm X maintains the status quo.
E.
both firms alternate between entering the market and maintaining the status quo.
Exam No： AP Micro Practice Test 4 Year：2024 Question No：APMicroeconomics2024AP0233
Answer:
A
Knowledge points:
3.5 Profit Maximization
4.1 Introduction to Imperfectly Competitive Markets
4.5 Oligopoly and Game Theory
Solution:
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