Business, 31.03.2020 03:59, wehack523

The accompanying payoff matrix presents the profits for Firm A and Firm B under two pricing strategies. Firm A's strategy High price Low price Firm B's strategy High price Firm A Profit = $ 87 $87 Firm B Profit = $ 87 $87 Firm A Profit = $ 105 $105 Firm B Profit = $ 49 $49 Low price Firm A Profit = $ 49 $49 Firm B Profit = $ 105 $105 Firm A Profit = $ 71 $71 Firm B Profit = $ 71 $71 Suppose both firms have agreed to employ strategies that maximize their combined profits. How will the firms act? Firm A will Set a high price Set a low price Firm B will Set a high price Set a low price Compare the profits of Firm A when both firms respect the collusive agreement to the profits of Firm A when Firm A secretly cheats on the agreement. How much additional profit would Firm A earn by secretly cheating on the agreement to collude? Round your answer to the nearest whole number. Firm A's additional profit when cheating: $ Compare the profits of Firm A when both firms respect the collusive agreement to the profits of Firm A when both firms cheat on the agreement. By how much would the profit of Firm A fall if both firms cheat on the agreement to collude? Round your answer to the nearest whole number. Firm A's lost profits when both cheat: $

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The accompanying payoff matrix presents the profits for Firm A and Firm B under two pricing strategi...