Question 1: Two firms, Small and Large, compete by price. Each can choose either a low price or a high price. The follow

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Question 1 Two Firms Small And Large Compete By Price Each Can Choose Either A Low Price Or A High Price The Follow 1 (18.04 KiB) Viewed 87 times

Question 1: Two firms, Small and Large, compete by price. Each can choose either a low price or a high price. The following payoff table shows the profit (in thousands of dollars) each firm would earn in each of the four possible decision situations: Large Low price High price Small Low price 5200, 5500 $600, S600 High price SO, S1,500 $400, S1,000 a) Is there a dominant strategy for Small? If so, what is it? Why? b) Is there a dominant strategy for Large? If so, what is it? Why? c) What is the likely pair of decisions? What payoff will each receive?