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:

Mycorrhizae

Symbiotic associations between fungi and the roots of plants, improving nutrient and water uptake.

Epiphytes

Plants that grow on other plants for physical support but do not extract nutrients from their hosts, thus not parasitic.

Species Richness

A measure of the number of different species represented in an ecological community, landscape or region.

Disturbance Hypothesis

posits that disturbances in an ecosystem can create opportunities for new species to colonize, thus affecting biodiversity.