-Suppose Two Companies,Sony and Magnavox,are Competing in a Duopoly

question 145

Essay

-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:

Intelligence

The ability to acquire and apply knowledge and skills, including problem-solving, learning, and the adaptation to new situations.

Least Important

A term typically used in prioritization or evaluation contexts, indicating the item with the lowest priority or significance in a given list or comparison.

Great Person Approach

A theory suggesting that history is shaped by the actions of great leaders or exceptionally talented individuals with innate qualities of leadership.

Political Leaders

Individuals who hold positions of power in government organizations and are responsible for setting and implementing policies and decision-making.