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AP® Microeconomics

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Blue Shirts, Red Pants

APMICR-WSVEFF
Red Pants Red Pants
Strategy 1 Strategy 2
Blue Shirts Strategy 1 \$3000, \$1500 \$2000, \$1000
Blue Shirts Strategy 2 \$2000, \$500 \$1000, \$3000

The payoff matrix above shows the possible profits associated with the strategic decisions that could be made by two oligopolistic firms, Blue Shirts Company and Red Pants Company. The first numbers in each cell represent the profits that Blue Shirts can expect to earn, while the second numbers represent Red Pants’ potential earnings. What are the dominant strategies for Blue Shirts and Red Pants, respectively?

A

Blue Shirts Strategy 1; Red Pants Strategy 2

B

Blue Shirts Strategy 2; Red Pants Strategy 1

C

Blue Shirts Strategy 1; Red Pants Strategy 1

D

Blue Shirts No dominant strategy; Red Pants Strategy 2

E

Blue Shirts Strategy 1; Red Pants No dominant strategy