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Consider a punishment variation of the two-rm oligopoly situation shown in the figure below. Suppose that if one firm sets a low price while the

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Consider a \"punishment\" variation of the two-rm oligopoly situation shown in the figure below. Suppose that if one firm sets a low price while the other sets a high price, then the rm setting the high price can ne the firm setting the low price. Suppose that whenever a fine is imposed, Xdollars are taken from the low-price firm and given to the high-price firm. RareAir's price strategy High Low High Uptown's price strategy Low

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