9 course ECON TI 9 Microsoft Powe T 9 5hort Answer p 2018

9 course: ECON TI 9 Microsoft Powe . T 9 5hort Answer p × 2018 Midtem: Q ? 14 Pt. 2-0, -Course Home @ Do Homework- O Nawal EZog ? e Sign ln or Sign l G Suppose for 8i Mmo Toshibe a http://feed helperb G Google D olslaap G JI M > ? d b 10 D .ci ? ? 1 ws meintenance engin English \\ Engi an 2? sj Regina Y Use monitorin a se. Dictionary.com I Fi ProQu \" w u Mohammmed AlmohammedI 6/24/18 12-04 AM Homework: Assignment #11 Score: 0 of 1 pt Concept: Cartels Save 10 of 20 9 complete) Hw Score: 43.33%, 8.67 of 20 pts Question Help * -Saudi Arabia and Kiwait. Bath countrias Consider tha marknt for oil. Suppose for simplicity that thern are onhy two ai praducing countries must chvose whether to praduc e a low oulpul or a high output These output strategies with corresponding profts are depicted in the payoft main\'s to the right. KuwBit\'s profits are in red and Saudi Arabia\'s ane in blue. Suppase the two cauntries for a carel. What is the cooperati eqilibrium? Low Output High Output O A. The cooperative equlibrium is for Saudi Arabia to produce a low output and Kuwait to produce a high output. O B. A cooperatve equilibrum does not exist for this game. O C. Tha cooparative equlibrium is for Saudi Arabla to produce a low output and Kuwalt to produce a low output. O D. Tha cooparative oqulibrium is for Saudi Arabia to produce a high autput and Kurwait to produce a high autput. $125 575 Low Output E· Tre cooperative equibriumis for Saudi Arabia to produce a hgh output and Kuwait to produce a lo w output. Saudi Arabia $103 High Output $7 Click to select your answer and then click Check Answer Clear Al Check Answer remaining

Solution

Correct option is (C).

In a cooperative outcome, both players will choose strategy that maximizes joint profit. In this case, if both chooses a Low Output, joint profit (= $125 + $10 = $135) is maximized.