Consider two of Nike's best-selling shoe models: Air Jordan 11 Retros and LeBron 18s. Demand for these shoes is governed by the following symmetric system:

Q_A(p_A,p_L)=10504p_A+p_L,

Q_L(p_A,p_L)=10504p_L+p_A,

wherep_Ais the Air Jordan price, andp_Lis the LeBron price. Both prices are in dollars, and quantities are measured in thousands of pairs of shoes. The marginal cost of producing either kind of shoes is $50 per pair.Assume the divisions that price the two models are playing theCooperation Game. Are each of the following statements true or false?

1. The Air Jordan division's best-response function isp_A(p_L)=150+p_L/4.

2.At Nash equilibrium, the Air Jordan division sets its price to $200.

3.At Nash equilibrium, the LeBron division sets its price to $150.

4.The joint-profit-maximizing prices will not be Nash-equilibrium prices in the Cooperation Game.

5.If the Air Jordan division sets its price to $50, then the LeBron division would best-respond with the same price in theCompetition Gameas it would in theCooperation Game.