-Suppose Intel and AMD Can Each Charge Either $300 or $200

question 132

Multiple Choice

-Suppose Intel and AMD can each charge either $300 or $200 for a CPU (the computing unit of a computer) .The above table illustrates the payoffs,in millions of dollars,from each of the four possible outcomes that could occur in their duopoly setting.What must Intel's price be for AMD to earn $220 million in profit?

• A) $200
• B) $400
• C) $220
• D) either $300 or $400 because AMD earns $220 million in profit either way
• E) None of the above answers is correct because the payoff matrix shows that it is not possible for AMD to earn $220 million in profit

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