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Two firms are competing in a duopoly and are trying to decide which price to set. The two prices und

Two firms are competing in a duopoly and are trying to decide which price to set. The two prices under consideration are a high monopoly price and a low competitive level. If both seller A and seller B chose the monopoly price, each will earn $20 million of economic profit. However, if one picks the monopoly price while the other picks the competitive price, the high-price firm will lose $1 million while the low-price firm will earn $32 million. If both sell at the competitive level, they both earn a normal profit. Complete the payoff matrix below and determine the Nash equilibrium.

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Essential Foundations of Economics

Edition: 7^th

Authors: Bade, Parkin

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Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible.

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Loraine Author

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This helped my grade so much Perfect

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