Suppose two companies,Sony and Magnavox,are competing in a duopoly.If both companies charge a high price,they each earn $700 million in economic profit.If both companies charge a low price,they each earn $500 million in economic profit.If one company charges a high price and the other a low price,the company charging the higher price earns $450 million in economic profit and the company charging the lower price earns $800 million in economic profit.
a.Complete the payoff matrix below for Sony and Magnavox. 
b.Find the Nash equilibrium.
Definitions:
Market Failures
Situations where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.
Shortage
The amount by which the quantity demanded of a product exceeds the quantity supplied at a particular (below-equilibrium) price.
Market
Any institution or mechanism that brings together buyers (demanders) and sellers (suppliers) of a particular good or service.
Majority Voting
A decision-making process where the choice that gathers more than half of the votes wins, commonly used in democratic elections and organizations.
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