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hardy7luver hardy7luver
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A year ago
The Prisoners' Dilemma

The payoff matrix shows the possible profits for a duopoly when deciding between charging a low price or a high price. Firm A's profit is show in blue and Firm B's profit is shown in green.



Assume that P1=$71, P2=$12, P3=$95, and P4=$47.5. If the firms do not collude, both firms will charge the ________. If the firms do collude, each firm will charge the ________. What are the gains from collusion?

▸ low price, low price, $47.50

▸ low price, high price, $23.50

▸ high price, high price, $35.50

▸ high price, low price, $59.00
Textbook 
Macroeconomics

Macroeconomics


Edition: 3rd
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mmorris1537mmorris1537
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A year ago
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