7. (10 pts.) Sony and LG are competing on the newest version of HD TVs. Two pricing strategies exist: price high or price low. The profit from each of the four possible combinations of decisions is given in the following payoff matrix: Sony's price High (S4000) Low (S2000) LG 's price High ($4000) LG: LG: Payoffs in dollars of profit. Low ($2000) a) (2 pts.) Which strategy offers both Sony and LG the best combined financial outcome? b) (2 pts.) Does either firm have a dominant strategy? If yes, which firm and what strategy? c) (4 pts.) The Nash equilibrium is for LG to set its price at and earn a profit of and for Sony to set its price at and earn a profit of d) (2 pts.) Why do we see that the strategy that results is not the strategy that offers both players the best financial outcome?