Consider a differentiated productsduopoly game in which firms have three possiblestrategies:C= collusion, B= Bertrand and W= price war. Where Bertrand model deals with price discrimination i.e. focus on price to maximise profits.Pay-offs(in terms of profit) for the two firms are given below;

Firm2 startegiesFirm1 Strategies

CBWC[4, 4][0, 5][-1, 5]B[5, 0][2, 2][-1, 1]W[5, -1][1, -1][0, 0]

a)What is a dominant strategy for each player? [2]

b)What are the possible pure strategy Nash equilibrium/equilibria to the one-shot play of this game? [2]

c) Explain the likely out the game [2]