• Use the following Payoff Matrix for Company A and Company B, the only two companies that produce widgets, to answer the following questions.
• What is the expected outcome of this one-time (not repeated) game? Defend your answer.
• How might your answer change if the game is repeated indefinitely?
• To what extent does this example illustrate why firms in some concentrated oligopolies exhibit cooperative or collusive behavior even though they don't explicitly collude?

Company B Lowers PriceCompany B Does Not Lower Price

Company A Lowers PriceCompany B's Payoff: $100

Company A's Payoff: $100Company B's Payoff: -$100

Company A's Payoff: $1,000Company A Does Not Lower PriceCompany B's Payoff: $1000

Company A's Payoff: -$100Company B's Payoff: $500

Company A's Payoff: $500