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1.Consider the Cournot game I have presented below. I have populated it with hypothetical economic profits based upon the quantity (low or high) chosen by

1.Consider the Cournot game I have presented below. I have populated it with hypothetical economic profits based upon the quantity (low or high) chosen by each firm. What is the predicted outcome and why? Why is the collusive outcome not an equilibrium? [6 marks]

FIRM B

q_low

q_high

FIRM A

q_low

A: $100K

B: $100K

A: $10K

B: $150K

q_high

A: $150K

B: $10K

A: $60K

B: $60K

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