Consider a market with two firms, Hewlett-Packard (HP) and Dell, that sell printers. Both companies must choose whether to charge a high price ($450) or a low price ($350) for their printers. These price strategies with corresponding profits are depicted in the payoff matrix to the right. HP's profits are in red and Dell's are in blue. Suppose HP and Dell are initially at the game's Nash equilibrium. Then, HP and Dell advertise that they will match any lower price of their competitors. For example, if HP charges $350 then Dell will match that price and also charge $350 What effect will matching prices have on profits (relative to the Nash equilibrium without price matching)? HP's profit will change by $(blank) and Dell's profit will change by (blank) (Enter either positive or negative numeric responses using integers.) HP $80/$8 $90/$5 Dell $5/$90 $45/$45

Consider a market with two firms, Hewlett-Packard (HP) and Dell, that sell printers. Both companies must choose whether to charge a high price ($500) or a low price ($350) for their printers. These price strategies with corresponding profits are depicted in the payoff matrix to the right. HP's profits are in red and Dell's are in blue. Suppose HP and Dell are initially at the game's Nash equilibrium. Then, HP and Dell advertise that they will match any lower price of their competitors. For example, if HP charges $350, then Dell will match that price and also charge $350. What effect will matching prices have on profits (relative to the Nash equilibrium without price matching)? (Enter either positive or negative numeric HP's profit will change by $ and Dell's profit will change by responses using integers.) Price = $500 Dell Price $350 HP Price = $500 Price = $350 $80 $100 $80 $15 $15 $50 $100 $50

Consider a market with two firms, Hewlett-Packard (HP) and Dell, that sell printers. Both companies must choose whether to charge a high price ($400) or a low price ($350) for their printers. These price strategies with corresponding profits are depicted in the bavoli matris to the right. HP's profits are in red and Dell's are in blue. Suppose HP and Dell are initially at the game's Nash equilibrium. Then, HP and Dell advertise that they will match any lower price of their competitors. For example, if HP charges $350, then Dell will match that price and also charge $350. What effect will matching prices have on profits (relative to the Nash equilibrium without price matching)? Assuming HP and Dell can coordinate to maximize profits, HP's profit will change by $ and Dell's profit will change by (Enter either positive or negative numeric responses using integers.) Price $400 Dell Price $350 HP Price = $400 Price $350 $80 $90 $80 $20 $20 $50 $90 $50 G

Consider a market with two firms, Kellogg and Post, that sell breakfast cereals. Both companies must choose whether to charge a high price ($4.00) or a low price ($2.50) for their cereals. These price strategies, with corresponding profits, are depicted in the payoff matrix to the right. Kellogg's profits are in red and Post's are in blue. Kellogg What is the cooperative equilibrium for this game? $4.00 Price = $2.50 Price = O A. The cooperative equilibrium is for Kellogg to choose a price of $2.50 and $800 $50 Post to choose a price of $4.00. Price = $4.00 $800 %3D OB. The cooperative equilibrium is for Kellogg and Post to both choose a price 006$ of $2.50. Post C. The cooperative equilibrium is for Kellogg and Post to both choose a price of $4.00. Price = $2.50 $350 OD. The cooperative equilibrium is for Kellogg to choose a price of $4.00 and Post to choose a price of $2.50. %3D $50 $350 OE. A cooperative equilibrium does not exist for this game. Is the cooperative equilibrium likely…