1. Two auto repairs shops compete against each other in a community. Both are considering an increase in prices charged for car repair services. Their interdependent alternatives are described by the payoff matrix below. The first number is the payoff for Firm 1 and the second number is the payoff for Firm 2.

Firm 2 Increase Not Increase Increase (9,16) (8,15) Firm 1 Not Increase (10,14) 7.9)