Please answer 4. A-D below:

Two firms are in the chocolate market. Each can choose to go for the high end of the market (high quality) or the low end (low quality). Resulting profits are given by the following payoff matrix:

a) what outcomes if any, are nash equillibria?

b)if the managers of both firms are conservative and each follows a maximin strategy, what will be the outcome?

c) what is the cooperative outcome?

d) which firm benefits the most from a cooperative outcome?How much would the firm need to offer to persuade the other to collude?

to speed up its planning? How much will it spend? Should the other firm spend anything to speed up its planning? Explain. 4. Two firms are in the chocolate market. Each can choose to go for the high end of the market (high qual- ity) or the low end (low quality). Resulting profits are given by the following payoff matrix: FIRM 2 Low High Low -20, -30 900, 600 FIRM 1 High 100, 800 50, 50 a. What outcomes, if any, are Nash equilibria? b. If the managers of both firms are conservative and each follows a maximin strategy, what will be the outcome? c. What is the cooperative outcome? d. Which firm benefits most from the cooperative out- come? How much would that firm need to offer the other to persuade it to collude? 5. Two major networks are competing for viewer rat- ings in the 8:00-9:00 p.m. and 9:00-10:00 p.m. slots on a given weeknight. Each has two shows to fill these time periods and is juggling its lineup. Each first lace