Two restaurants, in a small town, compete in the market for pizza. Each restaurant must decide whether to charge a high price or a low price. The potential monthly profits for these firms are as shown below (in thousands of dollars).

a) Do either of the restaurants have a dominant strategy?
b) What is the Nash equilibrium?

Question

Two restaurants, in a small town, compete in the market for pizza. Each restaurant must decide whether to charge a high price or a low price. The potential monthly profits for these firms are as shown below (in thousands of dollars).
  
a)	Do either of the restaurants have a dominant strategy?
b)	What is the Nash equilibrium?

Quizplus · Accepted Answer

The Answer of Two restaurants, in a small town, compete in the market for pizza. Each restaurant must decide whether to charge a high price or a low price. The potential monthly profits for these firms are as shown below (in thousands of dollars).
  
a)	Do either of the restaurants have a dominant strategy?
b)	What is the Nash equilibrium?

Two Restaurants, in a Small Town, Compete in the Market