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Which of the following is not correct about this extensive-form game? If Firm 1 enters with a high price, then Firm 2 will be indifferent
Which of the following is not correct about this extensive-form game? If Firm 1 enters with a high price, then Firm 2 will be indifferent between the options of matching or receiving a payment of $25 from Firm 1 to stay out (in terms of Firm 2's economic pay-off) If Firm 2 undercuts Firm 1, then Firm 1 is better off (1) retaliating if they entered with a high price and (2) succumbing if they entered with a low price If Firm 1 enters with a low price, then Firm 2 will choose to undercut If Firm 1 enters with a low price, then Firm 1 would be better off paying Firm 2 a payment of $25 to stay out of the market (in terms of Firm 1's economic pay-off) Firm 2 will not stay out regardless of Firm 1's decision in the first stage
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