Suppose two companies,Sony and Magnavox,are competing in a duopoly.If both companies charge a high price,they each make $700 million in economic profit.If both companies charge a low price,they each make $500 million in economic profit.If one company charges a high price and the other a low price,the company charging the higher price makes $450 million in economic profit and the company charging the lower price makes $800 million in economic profit.
a.Complete the payoff matrix below for Sony and Magnavox.
b.Find the Nash equilibrium.
Definitions:
Myelin Sheaths
Insulating layers around nerves that increase the speed at which electrical impulses are transmitted.
Interneuron
A type of neuron that serves as a connector or intermediary between sensory neurons and motor neurons in the central nervous system.
Central Nervous System
Comprises the brain and spinal cord, responsible for coordinating body activities.
Schwann Cells
Specialized cells that form the myelin sheath around nerve fibers in the peripheral nervous system, aiding in the rapid transmission of electrical signals.
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