Oligopoly and Game Theory- Micro Topic 4.5

The video tutorial explains economic concepts focusing on oligopolies and game theory. It uses a market scenario with two competing firms, ACDC and Clifford Taxi, to illustrate how firms decide on pricing strategies. The tutorial discusses dominant strategies, showing that ACDC has a dominant strategy to maintain prices, while Clifford lacks one. The final scenario concludes with both firms maintaining their prices.

What are the possible strategies for Clifford Taxi in response to ACDC Taxi's pricing?

What is a dominant strategy in the context of game theory?

How does ACDC Taxi determine its dominant strategy?

What should Clifford Taxi do if ACDC Taxi decides to lower its price?

Explain why Clifford Taxi does not have a dominant strategy.