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In the following duopoly game, the two firms can either set the price of their product high or low. In this market, customers are very
In the following duopoly game, the two firms can either set the price of their product high or low. In this market, customers are very price sensitive: when one firm sets a low price it steals the majority of customers from its competitor. The game is represented in the table below. Firm B High Price Low Price High Price Firm A gets $500 Firm A get $300 Firm B gets $500 Firm B gets $600 Firm A Low Price Firm A gets $600 Firm A gets $400 Firm B gets $300 Firm B gets $400 Refer to table 16-4. The Nash-equilibrium in this market is: O A. firm A gets $500, firm B gets $500 O B. firm A gets $400, firm B gets $400 O C. firm A gets $600, firm B gets $300 D. firm A gets $300, firm B gets $600
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