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The following table shows two Potato farms in a single-stage duopoly game. Each firm makes its decision without knowledge of the other firm's decision. The
The following table shows two Potato farms in a single-stage duopoly game. Each firm makes its decision without knowledge of the other firm's decision. The payoffs for each firm represent economic profits, and firms prefer more profit to less. Country Potato Farm Produce 5,000 potatoes Produce 7,000 potatoes $25,000 $35,000 Produce $25,000 $10,000 5,000 City Potato potatoes Farm $10,000 $12,000 Produce $35,000 $12,000 7,000 potatoes a. How many potatoes will the firms produce if they decide to collude? b. What is Country Potato Farm's dominant strategy? Explain why your answer is the dominant strategy c. What is City Potato Farm's dominant strategy? Explain why your answer is the dominant strategy d. What is the Nash equilibrium total quantity of potatoes
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