The accompanying table shows two firms in a duopoly.Each firm makes its decision without knowledge of the other firm's decision.The payoffs for each firm represent economic profits,and each firm strictly prefers more economic profit than less.In this game,selling _________ subscriptions a month is a dominant strategy for Flixbuster and selling __________ subscriptions a month is a dominant strategy for Nextflix.

Question

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Selling 400 subscriptions a month is a dominant strategy for both Flixbuster and Netflix. This is because each firm's best response to the other firm's decision is to sell 400 subscriptions. Selling 200 subscriptions would result in lower economic profits for both firms, and selling 100 subscriptions would result in even lower economic profits. Therefore, both firms have a dominant strategy of selling 400 subscriptions. The resulting Nash equilibrium is (400, 400), where both firms earn economic profits of $80 million.

The Accompanying Table Shows Two Firms in a Duopoly