Consider the following payoff matrix in which the numbers indicate the profit in millions of dollars for a duopoly based either on a high-price or a low-price strategy.
Firm A
High-price Low-price
High-price A = $500
B = $500 A = $650
B = $300
Firm B
Low-price A = $300
B = $650 A = $400
B = $400
(a) What will be the result when each firm chooses a high-price strategy?