Suppose Coca-Cola and Pepsi-Cola, who do not communicate, are engaged in a sales game and each firm seeks to maximise profit. The firms set high price or low price. If both set high price, each makes $50 profit. If one sets a low price and the other a high price, the low-price firm makes $200 profit and the high-price firm makes $0. If both set low price, then each makes $25 profit.

What would be the equilibrium outcome of this game? Would the equilibrium outcome be better off or worse off to both Coca-Cola and Pepsi-Cola? Explain why