Firms A and B are duopolists with constant marginal cost 10. The only prices they can charge are 20 or 15. If both price at 20, each sells to eight customers; if both charge 15, each sells to ten customers. If one firm charges 20 and the other 15, the low-price firm gets 20 customers and the high-price none. The game is to be played once and prices must be chosen simultaneously.

a) Write down the payoff matrix.

b) Are there any dominated strategies? What is the outcome?