Two firms are in the chocolate market. Each can choose to go for the high end of the market (high quality) or the low end (low quality). Resulting profits are given by the payoff matrix below.

What outcomes, if any, are Nash equilibria?

The outcomes that are Nash equilibria are

A.

when Firm 1 chooses low and Firm 2 chooses low and when Firm 1 chooses low and Firm 2 chooses high.

B.

when Firm 1 chooses high and Firm 2 chooses low and when Firm 1 chooses low and Firm 2 chooses high.

C.

when Firm 1 chooses high and Firm 2 chooses high and when Firm 1 chooses low and Firm 2 chooses high.

D.

when both firms choose low and when both firms choose high.

E.

when Firm 1 chooses high and Firm 2 chooses low and when Firm 1 chooses high and Firm 2 chooses high.

.....

		Firm 2
		Low	High
Firm 1	Low	50, 30	800, 400
High	400, 1000	50, 70