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Each Company decides whether to charge… Show more Suppose

Paper help Economics Each Company decides whether to charge… Show more Suppose

Economics

Each Company decides whether to charge… Show more Suppose

Each Company decides whether to charge… Show more Suppose twocompanies,A and B are sellers on the same market. Each Company decides whether to charge a high price (H) or a low price (L) for the product. In the table below, the dollar amounts (in millions of $) represent the annual profits of the two companies: 1) Does eitherplayer have a dominant Strategy? Does the game have a dominant strategy? Explain. 2) Give adefinition for a Nash equilibrium. Does this game have a nash equilibrium? Explain. 3) Consider what would happen if Company A were able to make its price choice first, before Company B is able to set its price (assuming that B is able to observe A’s choice once made). Would Comay A choose the same price as in part a? Would Company B choose the same price as in pat a? Explain Please see Photo • Show less

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