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& & Town Henald & Increase Subscription Price & & Do Not Change Subscription Price & 200, 700 Daily Voice & }(c) Do Not Change Subscription Price Increase Subscription Price & 500, 400 & 300, 100 The two major newspapers in a city, Daily Voice and Town Horals are considering whether to raise the subscription price. The first entries in the matrix above show the profits to Daily Voice, and the second entries show the profits to Town Horals. Which of the following is consistent with the above payoff matrix? (A) Do Not Change Subscription Price is a dominant strategy for Daily Voice. (B) Do Not Change Subscription Price is a dominant strategy for Town Horals. (C) Increase Subscription Price is a dominant strategy for Daily Voice. (D) Increase Subscription Price is a dominant strategy for Town Herald. (E) There are no dominant strategies in the above payoff matrix.

Question

& & Town Henald & Increase Subscription Price 
 & & Do Not Change Subscription Price &  200,  700 
 Daily Voice & }(c)
Do Not Change Subscription Price 
Increase Subscription Price
 &  500,  400 &  300,  100 


The two major newspapers in a city, Daily Voice and Town Horals are considering whether to raise the subscription price. The first entries in the matrix above show the profits to Daily Voice, and the second entries show the profits to Town Horals. Which of the following is consistent with the above payoff matrix?
(A) Do Not Change Subscription Price is a dominant strategy for Daily Voice.
(B) Do Not Change Subscription Price is a dominant strategy for Town Horals.
(C) Increase Subscription Price is a dominant strategy for Daily Voice.
(D) Increase Subscription Price is a dominant strategy for Town Herald.
(E) There are no dominant strategies in the above payoff matrix.

& & Town Henald & Increase Subscription Price & & Do Not Change Subscription Price & 200, 700 Daily Voice & }(c) Do Not Change Subscription Price Increase Subscription Price & 500, 400 & 300, 100 The two major newspapers in a city, Daily Voice and Town Horals are considering whether to raise the subscription price. The first entries in the matrix above show the profits to Daily Voice, and the second entries show the profits to Town Horals. Which of the following is consistent with the above payoff matrix? (A) Do Not Change Subscription Price is a dominant strategy for Daily Voice. (B) Do Not Change Subscription Price is a dominant strategy for Town Horals. (C) Increase Subscription Price is a dominant strategy for Daily Voice. (D) Increase Subscription Price is a dominant strategy for Town Herald. (E) There are no dominant strategies in the above payoff matrix.

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ConradMaster · Tutor for 5 years

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# Explanation<br />A dominant strategy in game theory is a strategy that is the best for a player, no matter what the other player does. In this case, we are looking for a strategy that will maximize the profits for each newspaper, regardless of the other's choice.<br /><br />Let's analyze the payoff matrix for each newspaper:<br /><br />For Daily Voice:<br />- If Town Herald does not change its subscription price, Daily Voice will earn $500 if it also does not change its price, and $600 if it increases its price.<br />- If Town Herald increases its subscription price, Daily Voice will earn $200 if it does not change its price, and $300 if it increases its price.<br /><br />For Town Herald:<br />- If Daily Voice does not change its subscription price, Town Herald will earn $400 if it also does not change its price, and $300 if it increases its price.<br />- If Daily Voice increases its subscription price, Town Herald will earn $700 if it does not change its price, and $100 if it increases its price.<br /><br /># Answer<br />From the analysis, we can see that for Daily Voice, increasing the subscription price is a dominant strategy because it yields higher profits regardless of what Town Herald does. For Town Herald, there is no dominant strategy because the best choice depends on what Daily Voice does. Therefore, the correct answer is (C) Increase Subscription Price is a dominant strategy for Daily Voice.
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