2. Big Brew threatens Little Kona by saying If you enter we will set a low price so you had better stay out. True or False: Little Kona should believe the threat.If two firms could collude and agree on how to split the total profits what outcome would they pick? Big Brew maintains a low price and Little Kona enters. Big Brew maintains a low price and Little Kona does not enter. Brew maintains a high price and Little Kona does not enter.Big Brew maintains a high price and Little Kona enters.

Big Brew High Price Low Price Enter $2 million, $3 million -$1 million, $1 million Little Kona Don't Enter $0, $7 million $0, $2 million True or False: Only Little Kona has a dominant strategy in this game. O True O False Which of the following outcomes represent a Nash equilibrium in this case? Check all that ap O Big Brew maintains a low price and Little Kona does not enter. Big Brew maintains a low price and Little Kona enters. O Big Brew maintains a high price and Little Kona does not enter. Big Brew maintains a high price and Little Kona enters