Topic: Managerial Economics, please make answers copy/pastable, instead of an image, and highlight the result--thanks!

2.The payoff table below depicts the four possible profit outcomes (in millions of $s) for firm1 and firm 2, if each firm pursues the strategy described at the top of each column and the start of each row. The first payoff in each cell corresponds to firm 1's profits and the second payoff in each cell corresponds to firm 2's profits.Assume this is a simultaneous game.

Firm 2

Charge $5Charge $3

Charge $56, 61, 8

Charge $38, 13, 3

What is firm 1" dominant strategy? Explain making reference to the

numerical payoffs in the cells. (you absolutely may use > signs instead of writing out

the words)

What is firm 2's dominant strategy? Explain making reference to the

numerical payoffs in the cells. (you absolutely may use > signs instead of writing out

the words)

Which cell corresponds to the dominant strategy equilibrium? Why?

Clearly explain how this game illustrates the incentives to collude (cooperate) that

exist under oligopoly, but also illustrates that collusive (cooperative) arrangements

tend to be unstable. You should make reference to particular cells in the payoff table

above to explain this.