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In a simple model of duopoly, two firms produce the same good, for which each firm charges either a low or a high price. Each firm wants to achieve the highest profits. The following matrix shows strategies and payoffs for both firms that must decide how to price.Firm BHigh LowFirm A High 1000, 1000 -200, 1200Low 1200, -200 600,600
a. Does either firm have a dominant strategy, and if so, what is it?b. What is the Nash equilibrium of this game?c. Why would this be called a prisoner's dilemma game?
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