The payoff table shows the competition between a new entrant (Firm 1) and an incumbent firm (Firm 2). Determine each firm's equilibrium strategy.
$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Firm } 2\
\begin{array} { | c | c | c | }
\hline \text { Firm 1 } & \text { Fight } & \text { High price } \
\hline \text { Enter } & - 10,15 & 10,10 \
\hline \text { Not enter } & 0,20 & 0,20 \
\hline
\end{array}
\end{array}$

Question

The payoff table shows the competition between a new entrant (Firm 1) and an incumbent firm (Firm 2). Determine each firm's equilibrium strategy.
 $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Firm } 2\
\begin{array} { | c | c | c | } 
\hline \text { Firm 1 } & \text { Fight } & \text { High price } \
\hline \text { Enter } & - 10,15 & 10,10 \
\hline \text { Not enter } & 0,20 & 0,20 \
\hline
\end{array}
\end{array}$

Quizplus · Accepted Answer

The Answer of The payoff table shows the competition between a new entrant (Firm 1) and an incumbent firm (Firm 2). Determine each firm's equilibrium strategy.
 $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Firm } 2\
\begin{array} { | c | c | c | } 
\hline \text { Firm 1 } & \text { Fight } & \text { High price } \
\hline \text { Enter } & - 10,15 & 10,10 \
\hline \text { Not enter } & 0,20 & 0,20 \
\hline
\end{array}
\end{array}$

The Payoff Table Shows the Competition Between a New Entrant