Two firms choose the prices of their products on the first day of the month. The following payoff table shows their monthly payoffs resulting from the pricing decisions they can make

Firm B

Low Price

High Price

Firm A

Low Price

$400, $600

$100, $700

High Price

$600, $300

$150, $400

1.Is the Pricing decision facing the 2 firms a prisoner's dilemma situation? Why or why not?

Answer:

2.What is the outcome of the game if the firms do not cooperate in making the decision to choose their prices? Why?

Answer:

3.What is the outcome of the game if the firms do cooperate in making the decision to choose their prices? Why?

Answer: