i need part 4,A.B Question #6: Dell and Sony compete primarily by price. Each firm must choose either a highprice or a low price simultaneously. Use the following information to create the profit matrix:1. If Sony and Dell both set high prices, Dell's profit is $40 million and Sony's profit is $35million.2. If Dell sets high price and Sony sets low price, Dell's profit is $25 million and Sony's profit is$40 million.3. If Dell sets low price and Sony sets high price, Dell's profit is $50 million and Sony's profit is$10 million.4. If Dell and Sony set low prices, Dell has $20 million and Sony has $15 million.Please answer the follow questions:a. Does Sony have a dominant strategy? Dell? If so, which one?b. If Dell and Sony maximize their profits non-cooperatively, what is the Nash-equilibrium for thisgame?c. Instead, if Dell and Sony maximize their joint profits cooperatively for one year, what is the|equilibrium?d. Would your answer in part c above be different if Dell and Sony jointly maximize their profitsfor ten years, or indefinitely?e. From the policy maker standpoint who wants to maximize national welfare (ie consumersurplus and producer surplus), would you prefer Sony and Dell to cooperate or not to cooperateto set prices? Please explain why.

The payoff matrix of Sony and Dell is given below: Dell / Sony High low High…

Question #6: Dell and Sony compete primarily by price. Each firm must choose either a high price or a low price simultaneously. Use the following information to create the profit matrix: 1. If Sony and Dell both set high prices, Dell's profit is $40 million and Sony's profit is $35 million. 2. If Dell sets high price and Sony sets low price, Dell's profit is $25 million and Sony's profit is $40 million.

Question #6: Dell and Sony compete primarily by price. Each firm must choose either a high price or a low price simultaneously. Use the following information to create the profit matrix: 1. If Sony and Dell both set high prices, Dell's profit is $40 million and Sony's profit is $35 million. 2. If Dell sets high price and Sony sets low price, Dell's profit is $25 million and Sony's profit is $40 million.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter26: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 1E

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