Pricing Games (Max 100 points) Given the info in Exhibits 1, 2, and 3, would you predict that Sony and/or Microsoft will want to reduce console prices by $100? Use a 2-by-2 one-period simultaneous game to analyze the situation. Assume that Nintendo monitors its competitors' actions but has no plans to change its price.Exhibit 1 Prices and Projected Annual Sales Volumes for Sony PlayStation 3 and Microsoft Xbox 360 Elite PS3 Price Xbox 360 Price PS3 Xbox 360 Projected Number of Projected Number of Units Sold (millions) Units Sold (millions) $299 $299 11.25 11.5 $299 $399 11.75 7.0 $399 $299 8.25 12.5 $399 $399 8.75 8.0Exhibit 2 Sony PlayStation 3 Production Costs per Unit (US dollars) Units Produced 8.25 8.75 9.25 9.75 10.25 10.75 11.25 11.75 12.25 12.75 (in millions Production Labor 98 80 67 55 45 38 32 28 26 28 Materials & Parts 168 161 155 145 143 141 140 140 141 142 Overhead 66.67 62.86 59.46 56.41 53.66 51.16 48.89 46.81 44.90 43.14 Distribution 40 40 40 40 40 40 40 30 30 30 Per Unit Total Cost $372.67 $343.86 $321.46 $296.41 $281.66 $270.16 $260.89 $244.81 $241.90 $243.14 Exhibit 3 Microsoft Xbox 360 Elite Production Costs per Unit (US dollars) Units Produced 7.00 7.50 8.00 8.50 9.00 9.50 10.00 10.50 11.00 11.50 12.00 12.50 (in millions Production Labor 69 62 56 52 48 46 45 44 44 44 44 78 Materials & Parts 180 172 167 161 156 153 149 147 146 145 144 144 Overhead 64.29 60.00 56.25 52.94 50.00 47.37 45.00 42.86 40.91 39.13 37.50 36.00 40 40 40 40 30 30 30 Distribution 50 50 50 40 40 Per Unit Total Cost $372.29 $351.00 $335.25 $309.94 $298.00 $288.37 $280.00 $274.86 $270.91 $258.13 $255.50 $254.00