Figure 12-4 -The Above Matrix (Figure 12-4) Displays the Possible Profit Results

question 74

Essay

Figure 12-4

-The above matrix (Figure 12-4) displays the possible profit results of two firms, A and B, from following two different possible strategies: charging a high price and charging a low price.In each cell, the first number is the profit of firm A, and the second number is the profit of firm B.
a.Assume that collusion is not possible.Determine the optimal strategy for each firm.Explain why it is the best strategy to follow.
a., explain why firms collude.What are the pitfalls of collusion?
b.Based on your answer to

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Definitions:

Collective Intelligence

The shared or group intelligence that emerges from the collaboration and competition of many individuals and appears in consensus decision making.

Wikis

Web-based platforms that allow collaborative creation, editing, and sharing of content by multiple users.

Live Notification

Real-time alerts or messages that are delivered instantly to inform users about events or updates.

Physical Stores

Brick-and-mortar locations where businesses sell their products or services to customers in person.