Refer to the normal-form game of price competition in the payoff matrix below.

Firm A	Firm B
	Low Price	High Price
Low Price	0, 0	50, 10
High Price	10, 50	20, 20

Suppose the game is infinitely repeated, and the interest rate is 10 percent. Both firms agree to charge a high price, provided no player has charged a low price in the past.

(a) If both firms stick to this agreement, then what is the present value of firm A's payoffs?

Please show your calculations.

(b) If firm A cheats, what is the present value of the returns for Firm A for cheating? Please show

your calculations.