Course Hero * Southern New Hampshire Univer x B 7-1 Quiz - ECO-201-T2864 Micro x MindTap - Cengage Learning * MindTap - Cengage Learning X + X ng.cengage.com/staticb/ui/evo/index.html?deploymentid=5981412353502464190243042516&eISBN=9780357133576&id=1327466681&snapshotld=2654212& Ramel CENGAGE |MINDTAP Q Search this course ? Module Seven Quiz X My Home Courses Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Catalog and Study Tools A-Z Rental Options Pictech Pricing High Low College Success Tips High 11, 11 2, 18 Flashfone Pricing Career Success Tips Low 18, 2 10, 10 ? Help Give Feedback For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $18 million, and Pictech will earn a profit of $2 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms. If Flashfone prices high, Pictech will make more profit if it chooses a price, and if Flashfone prices low, Pictech will make more profit if it chooses a price. If Pictech high gh, Flashfone will make more profit if it chooses a price, and if Pictech prices low, Flashfone will make more profit if it chooses a low price Considering all of the information given, pricing low a dominant strategy for both Flashfone and Pictech. At If the firms do not collude, what strategies will they end up choosing? Both Flashfone and Pictech will choose a low price. Flashfone will choose a low price, and Pictech will choose a high price. O O Flashfone will choose a high price, and Pictech will choose a low price. Both Flashfone and Pictech will choose a high price. True or False: The game between Flashfone and Pictech is an example of the prisoners' dilemma. True False M 8 0 3:23