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Firm A: High Price A: $6 В: $6 Low Price A: $8 High Price B: -$2 Firm B: A: -$2 B: $8 A: $0 B: $0 Low Price The above payoff matrix shows the economic profits (in millions of dollars) of two firms in a duopoly that have agreed to a cartel agreement to keep their prices high. Assuming the game is played once, the Nash equilibrium outcome is where firm B charges the high price and firm A charges the low price firm A charges the high price and firm B charges the low price both charge the low price both charge the high price

Firm A: High Price A: $6 В: $6 Low Price A: $8 High Price B: -$2 Firm B: A: -$2 B: $8 A: $0 B: $0 Low Price The above payoff matrix shows the economic profits (in millions of dollars) of two firms in a duopoly that have agreed to a cartel agreement to keep their prices high. Assuming the game is played once, the Nash equilibrium outcome is where firm B charges the high price and firm A charges the low price firm A charges the high price and firm B charges the low price both charge the low price both charge the high price

Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter17: Oligopoly
Section: Chapter Questions
Problem 9PA
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Firm A: High Price A: $6 В: $6 Low Price A: $8 High Price B: -$2 Firm B: A: -$2 B: $8 A: $0 B: $0 Low Price The above payoff matrix shows the economic profits (in millions of dollars) of two firms in a duopoly that have agreed to a cartel agreement to keep their prices high. Assuming the game is played once, the Nash equilibrium outcome is where firm B charges the high price and firm A charges the low price firm A charges the high price and firm B charges the low price both charge the low price both charge the high price
Transcribed Image Text:Firm A: High Price A: $6 В: $6 Low Price A: $8 High Price B: -$2 Firm B: A: -$2 B: $8 A: $0 B: $0 Low Price The above payoff matrix shows the economic profits (in millions of dollars) of two firms in a duopoly that have agreed to a cartel agreement to keep their prices high. Assuming the game is played once, the Nash equilibrium outcome is where firm B charges the high price and firm A charges the low price firm A charges the high price and firm B charges the low price both charge the low price both charge the high price
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