Two firms in Ithaca both making sandwiches have two strategies available: charge a low price and charge a high price. In each cell (box) the first entry is the profit to Angie’s Sandwiches (AS) and the second entry is the profit per week for James Jems. (JJ) JJ charges low price JJ charges high price AS charges low price $20,000, $20,000 $45,000, $50,000 AS charges high price $50,000, $35,000 $30,000, $30,000 1. Is there a Nash Equilibrium? Where is it? Explain. 2. In which cell will the total profit be a maximum?
Two firms in Ithaca both making sandwiches have two strategies available: charge a low price and charge a high price. In each cell (box) the first entry is the profit to Angie’s Sandwiches (AS) and the second entry is the profit per week for James Jems. (JJ) JJ charges low price JJ charges high price AS charges low price $20,000, $20,000 $45,000, $50,000 AS charges high price $50,000, $35,000 $30,000, $30,000 1. Is there a Nash Equilibrium? Where is it? Explain. 2. In which cell will the total profit be a maximum?
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter10: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 13PAE
Related questions
Question
E.
|
JJ charges low price |
JJ charges high price |
AS charges low price |
$20,000, $20,000 |
$45,000, $50,000 |
AS charges high price |
$50,000, $35,000 |
$30,000, $30,000 |
1. Is there a Nash Equilibrium? Where is it? Explain.
2. In which cell will the total profit be a maximum?
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