- A market has only 2 sellers. They are both trying to decide on a pricing strategy. If both firms charge a high price, then each firm will experience a 5% increase in profits. If both firms charge a low price, then each firm will experience a 3% increase in profits. If Firm 1 charges a high price and Firm 2 charges a low price, then Firm 1 will experience a 1% increase in profits and Firm 2 will experience a 6% increase in profits. If Firm 2 charges a high price and Firm 1 charges a low price, then Firm 2 will experience a 2% increase in profits and Firm 1 will experience a 7% increase in profits.
- Construct a payoff matrix for this game.
- Determine whether each firm has a dominant strategy and, if it does, identify the strategy.
- Determine the optimal strategy for each firm.
- Determine the Nash equilibrium. (v) Is this a prisoners’ dilemma? How do you know?
- Respond to the charge that immigrants flood the labor market and drive down wages in the U.S?
Instructions: Minimum of 300 words not including question and/or citations. 2 schorlary APA formated citations and include a Bible verse that reflect the two subjects. please keep paragraphs seperated and place on word document. place wordcount:??? at bottom of page. oringinal work only
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