PROBLEM 44 Suppose a small town has only two firms (firm] and firm 2) selling the same

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PROBLEM 44

Suppose a small town has only two firms (firm] and firm 2) selling the same product. Each firm can either set a high price (H) or a low price (L) for its product. The payoff matrix below displays the profits per day given the combination of prices for both firms. The first entry shows firml's profits while the second entry shows the second firm's profits. The information displayed in the playoff matrix are known by both firms. Firm 2 High price Low Price High price $210; $220 $80; $260 Firm 1 Low Price $240; $160 $150; $140 1. Does each firm have a dominant strategy to set a high price, a don rant strategy to set a low price, or does it have no dominant strategy? In other words, find the dominant strategy of each firm, if it exists. Explain your

Posted Date: Jun 21, 2024 07:09 PM

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PROBLEM 44 Suppose a small town has only two firms (firm] and firm 2) selling the same

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