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6. Two competing retail firms, A and B, must decide on the level of variety of their merchandise. The options are high variety, medium or
6. Two competing retail firms, A and B, must decide on the level of variety of their merchandise. The options are high variety, medium or low. Below are their payoffs from the 3 strategy options. B Low Medium High Low 100, 100 150, 200 200, 300 A Medium 200, 75 125, 150 225. 195 High 300, 200 100, 225 150, 250 (A's payoff shown first) The firm compete in a simultaneous one-period game. If the government passed a law requiring retailers to carry a high variety of merchandise, which retailer, if either, would be better off? Explain your reasoning. (12 pt:)
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