Question
Suppose apple and Samsung ,who do not communicate, are engaged in a small phone sales game and each firm seek to maximize profit. The firms
Suppose apple and Samsung ,who do not communicate, are engaged in a small phone sales game and each firm seek to maximize profit. The firms set high price to low price. If both high price each makes $100 profit per phone. If one sets a low price and the other a high price, the high-price firm makes $500 profit per phone and the low price firm makes $50.if both set low price, then each makes $200 profit per phone.
What would be the equilibrium outcome of the game? Would the equilibrium outcome be better off or worse off to both apple and Samsung? Explain why ?
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