Business, 19.04.2021 15:50, chrissulli4605

Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing
High Low
Flashfone Pricing High 11, 11 2, 18
Low 18, 2 10, 10

For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $18 million, and Pictech will earn a profit of $2 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms.

a. If Flashfone prices high, Pictech will make more profit if it chooses a (high, low) price, and if Flashfone prices low, Pictech will make more profit if it chooses a(high, low) price.
b. If Pictech prices high, Flashfone will make more profit if it chooses a(high, low)price, and if Pictech prices low, Flashfone will make more profit if it chooses a (high, low) price.
c. Considering all of the information given, pricing high (is, is not) a dominant strategy for both Flashfone and Pictech.

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Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff...