Table A shows the pricing options for two hair salons, one operated by Sue and the other by Jane, as an oligopoly in a rural market. Which of the following pricing strategies does Table 2 depict?

Table A

Pricing strategies for Sue's Hair Salon when charging the LOW PricePricing strategies for Sue's Hair Salon when charging the HIGH PriceIf Sue and Jane both charge LOW price, BOTH get $400 each If Sue charges the HIGH price and Jane charges the LOW price, Sue GETS $0, and Jane gets $800If Jane charges HIGH price and Sue charges LOW price, Jane gets $0 and Sue gets $800If Sue and Jane both charge the HIGH price, BOTH get $600 each

TABLE 2First Period Choose High or low priceFirst Period ProfitSecond Period Choose High or low priceSecond Period ProfitTotal Profit in both periodsSueLow$400Low$400$800JaneLow$400Low$400$800

Question 8 options:

a)

Sue always plays "Tit-for-Tat" and Jane always plays "Tit-for-Tat."

b)

Sue always plays "Tit-for-Tat" and Jane always chooses the "Low" price.

c)

Jane always plays "Tit-for-Tat" and Sue always chooses the "Low" price.

d)

Jane always chooses the "Low" price and Sue always chooses the "Low" price.

e)

When there is only a single period in which to choose and Jane does not know what Sue will do, Jane always chooses the Nash Noncooperative Equilibrium price strategy.

Question 9(8 points)

Table B shows the pricing options for two medical doctors operating as an oligopoly in a rural market. Which of the following pricing strategies does Table 7 depict?

Table B

Pricing strategies Dr. Good charges LOW PricePricing strategies Dr. Good charges HIGH PriceIf Dr. Good and Dr. Fine both charge LOW price, BOTH get $350 eachIf DR. Good charges the HIGH PRICE and Dr. Fine charges the LOW PRICE, Dr. Good GETS $0, and Dr. Fine gets $700If Dr. Fine charges HIGH PRICE and Dr. Good charges LOW PRICE, Dr. Fine gets $0 and Dr. Good gets $700If Dr. Good and Dr. Fine both charge the HIGH PRICE, BOTH get $500 each

TABLE 7First Period Choose High or low priceFirst Period ProfitSecond Period Choose High or low priceSecond Period ProfitTotal Profit in both periodsDr. GoodLow$350Low$350$700Dr. FineLow$350Low$350$700

Question 9 options:

a)

Dr. Fine always plays "Tit-for-Tat" and Dr. Good always plays "Tit-for-Tat."

b)

Dr. Fine always plays "Tit-for-Tat" and Dr. Good always chooses the "Low" price.

c)

Dr. Good always plays "Tit-for-Tat" and Dr. Fine always chooses the "Low" price.

d)

Dr. Good always chooses the "Low" price and Dr. Fine always chooses the "Low" price.

e)

When there is only a single period in which to choose and Dr. Fine does not know what Dr. Good will do, Dr. Fine always chooses the Nash Noncooperative Equilibrium price strategy.

Question 10(8 points)

Table A shows the pricing options for two hair salons, one operated by Sue and the other by Jane, as an oligopoly in a rural market. Which of the following pricing strategies does Table 5 depict?

Table A

Pricing strategies for Sue's Hair Salon when charging the LOW PricePricing strategies for Sue's Hair Salon when charging the HIGH PriceIf Sue and Jane both charge HIGH price, BOTH get $400 eachIf Sue charges the HIGH price and Jane charges the LOW price, Sue GETS $0, and Jane gets $800If Jane charges HIGH price and Sue charges LOW price, Jane gets $0 and Sue gets $800If Sue and Jane both charge the HIGH price, BOTH get $600 each

TABLE 5First Period Choose High or low priceFirst Period ProfitSecond Period Choose High or low priceSecond Period ProfitTotal Profit in both periodsSueHigh$600High$600$1,200JaneHigh$600High$600$1,200

Question 10 options:

a)

Sue always plays "Tit-for-Tat" and Jane always plays "Tit-for-Tat."

b)

Sue always plays "Tit-for-Tat" and Jane always chooses the "Low" price.

c)

Jane always plays "Tit-for-Tat" and Sue always chooses the "Low" price.

d)

Jane always chooses the "Low" price and Sue always chooses the "Low" price.

e)

When there is only a single period in which to choose and Jane does not know what Sue will do, Jane always chooses the Nash Noncooperative Equilibrium price strategy.