Question

Finding dominant strategies is often a very way of analyzing a game. Consider the following game: Microsoft and Apple are the two firms in the market for operating systems. Each firm has two strategies charge a high price or charge a low price (payolls: Microsoft, Apple). What (if any) is the dominant strategy for each firm? A. Choosing low is a weakly dominant strategy for Apple. B. The dominant strategy is for Apple to choose low and Microsoft to choose high. C. Choosing low is a weakly dominant strategy for Microsoft. D. Choosing high is a weakly dominant strategy for Apple. Is there a Nash equilibrium? A. Yes. Apple and Microsoft both choose low. B. No. because Apple is indifferent between choosing high and low. C. Yes. Apple chooses low and Microsoft chooses high. D. Yes. Apple and Microsoft both choose high

Answer 1

Answer: Option A -- Choosing low is a weakly dominant strategy for Apple.

Explanation: Dominant strategy in a game theory can be defined as the course of action that occurs when one strategy/player is better than the other strategy/player regardless of what the other player does or how well the other player may play. dominant strategy is all about a player who has the highest favours in a game. Considering the above matrix, we know that Apple has the dominant strategy. And for apple to choose low is a weakly dominant strategy for it.