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 make $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 make $32 million.If both sell at the competitive level,they both make zero economic profit.Complete the payoff matrix below and determine the Nash equilibrium.
Definitions:
Work Status
The classification of an individual's employment based on criteria such as job type, full-time or part-time designation, and permanency, affecting rights and benefits.
Petit Bourgeoisie
The petit bourgeoisie typically refers to the lower middle class segment in society, often engaged in small-scale businesses or entrepreneurial ventures, possessing modest socioeconomic status.
Gini Index
A measure of the inequality of wealth or income distribution within a country.
Kuznet Curve
An economic theory that suggests inequality increases in the early stages of a country's development but decreases as the country becomes more economically advanced.
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