Table 16-4
In the following duopoly game, the two firms can either set the price of their product high or low. In this market, customers are very price sensitive: when one firm sets a low price it steals the majority of customers from its competitor. The game is represented in the table below.

-Refer to Table 16-4. Profit for each firm would be maximised if:

Question

Table 16-4
In the following duopoly game, the two firms can either set the price of their product high or low. In this market, customers are very price sensitive: when one firm sets a low price it steals the majority of customers from its competitor. The game is represented in the table below.
 
-Refer to Table 16-4. Profit for each firm would be maximised if:

Quizplus · Accepted Answer

Profit for each firm would be maximized if they could successfully collude, as this would allow them to set prices that maximize joint profits rather than competing against each other.

Table 16-4 In the Following Duopoly Game, the Two Firms Can Either