=+Us plays always charge the low price. iv. Untied plays tit for tat when Air “R” Us also plays tit for tat. 7. Suppose that Coke and Pepsi are the only two producers of cola drinks, making them duopolists. Both companies have zero marginal cost and a fixed cost of

$100,000.

a. Assume first that consumers regard Coke and Pepsi as perfect substitutes.