Suppose the market for cookbooks is a duopoly. The chart below shows a payoff matrix for the two cookbook producers.
a. Based on the information shown in the payoff matrix above, how much profit will each firm make if the firms are non-cooperative?
b. If producer 2 charges a high price and producer 1 charges a low price, how much profit will producer 1 make?
c. If the firms collude and set prices together, how much profit will each producer make?