Q. 2b) (2 mks) What is Firm 1 and Firm 2 'dominant strategy'? Explain your reasoning.

Q. 2c) (2 mk) Where is the "NASH" equilibrium for Firm 1 and Firm 2 in the above matrix?

Q. 2d) (2 mk) What are the outcomes for Firm 1 and Firm 2?

Q. 2e) (2 marks) Is this a case of 'Prisoner's Dilemma' for Firm 1 & Firm 2? Explain. Q. 2f) (2 marks) Assume that Country X allows Firm 1 and Firm 2 to merge, briefly describe two ways in which a competitive market is better or more efficient than a monopoly market? (hints: in terms of price and quantity)

Country X only allows two different kinds of vaccine, Firm 1 and Firm 2, to be administered in the country. In order to be able to market vaccines in country X, these films are required to spend many millions on their research and development. They also have to go through many stringent tests to obtain approval from the health regulatory bodies. Q 2. a) (5 marks) Given the above information, What type of market structure is the vaccine market in Country X? Explain. Refer to the matrix below. \"Firm 1\" and c'Firm 2\" are non-collusive rms playing a game Where they have to choose whether to produce \"average quality\" or \"high quality\" product for vaccine. The outcomes of their prot (in 33M) are summarized below. Firm 2 Average Quality High Quality Firm 1 Average Quality 600, 600 400, 1100 High Quality 1100, 400 900, 900