Two companies, Acme and Bilco, are sellers in the same market.Each company decides whether to charge a high price or a low price.In the figure, the dollar amounts are payoffs and they represent annual profits for the two companies.

Acme's Decision High price Low price Acme's profit = $5 million Acme's profit = $7 million High price Bilco's profit = $5 million Bilco's profit = $2 million Bilco's Decision Acme's profit = $2 million Acme's profit = $3.25 million Low price Bilco's profit = $7 million Bilco's profit = $3.25 million