Megabucks and CashCow are the only two firms in a market. Each firm must decide whether to price high or price low. The payoffs from each strategy combination are shown to the right long dash in millions of dollars
The frist number in each pair is Megabucks' profit; the second is CashCow's profit.
If the firms cooperate, the strategy that Megabucks will choose is __________, and the strategy that CashCow will choose is __________.
If the firms behave opportunistically, the strategy that Megabucks will choose is __________, and the strategy that CashCow will choose is __________.
(price high, price low) (price high, price low)
(price high, price low) (price high, price low)
You might also like to view...
What are two ways that governments can prevent banking panics?
What will be an ideal response?
In order for effective price discrimination to occur, a seller must
a. be a pure monopolist. b. have large economies of scale and control over a key natural resource. c. face a horizontal demand curve for its product. d. have at least two distinguishable groups of consumers.