Exhibit 10-7 Two-Firm Payoff Matrix Camel High price Low price A High price $10 billion $10 billion -$5 billion $15 bill

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Exhibit 10 7 Two Firm Payoff Matrix Camel High Price Low Price A High Price 10 Billion 10 Billion 5 Billion 15 Bill 1 (57.59 KiB) Viewed 22 times

Exhibit 10-7 Two-Firm Payoff Matrix Camel High price Low price A High price $10 billion $10 billion -$5 billion $15 billion Marlboro B D Low price $15 billion -$5 billion $5 billion $5 billion Assume costs are identical for the two firms in Exhibit 10-7. If both firms were allowed to form a cartel and agree on their prices, equilibrium would be established by: Camel charging the low price and Marlboro charging the high price. Camel charging the high price and Marlboro charging the low price. Camel charging the high price and Marlboro charging the high price. Camel charging the low price and Marlboro charging the low price.