(Table) HH Gregg and Best Buy are competing for sales for their newest high-capacity mobile device battery packs. Each firm has a pricing strategy of either a high price or a low price. Profits for each store are listed in the payoff boxes, with Best Buy's payoff listed first. Based on the table, the Nash equilibrium for this game is
$\begin{array}{c}
\quad \quad \quad \quad \quad \quad \quad \quad \text { HH Gregg }\
\begin{array}{ccc}
\text { Best Buy }\
&& \text { High } & \text { Low } \
&\text { High } & 100,100 & 30,120 \
&\text { Low } & 120,30 & 50,50
\end{array}\end{array}$
A) High, High = (100, 100).
B) High, Low = (30, 120).
C) Low, High = (120, 30).
D) Low, Low = (50, 50).

Question

(Table) HH Gregg and Best Buy are competing for sales for their newest high-capacity mobile device battery packs. Each firm has a pricing strategy of either a high price or a low price. Profits for each store are listed in the payoff boxes, with Best Buy's payoff listed first. Based on the table, the Nash equilibrium for this game is
$\begin{array}{c}
\quad \quad \quad \quad \quad \quad \quad \quad \text { HH Gregg }\
\begin{array}{ccc} 
\text { Best Buy }\
&& \text { High } & \text { Low } \
&\text { High } & 100,100 & 30,120 \
&\text { Low } & 120,30 & 50,50
\end{array}\end{array}$
A) High, High = (100, 100).
B) High, Low = (30, 120).
C) Low, High = (120, 30).
D) Low, Low = (50, 50).

Quizplus · Accepted Answer

The Nash equilibrium is a scenario in which neither player can improve their payoff by unilaterally changing their strategy, assuming the other player's strategy remains unchanged. In the (Low, Low) = (50, 50) scenario, neither Best Buy nor HH Gregg can increase their profit by changing their pricing strategy while the other keeps theirs the same, making it the Nash equilibrium.

(Table) HH Gregg and Best Buy Are Competing for Sales