Unit VI ass

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Unit VI Assignment

Instructions: This assignment has two parts. Answer the questions using the charts.

Part 1:

A four quadrant box is labeled with Firm 1 at the top and Firm 2 on the left. The top left box is labeled high price on the top and high price on the left and contains 8, 8. The top right box is labeled low price on the top and high price on the left with 0, 10. The bottom left box is labeled High price on the top and low price on the left with 10, 0. The bottom right box is labeled Low price on the top and low price on the left with 3, 3.

Question: For the above game, identify the Nash Equilibrium. Does Firm 1 have a dominant strategy? If so, what is it? Does Firm 2 have a dominant strategy? If so, what is it?

Your response:

Part 2:

A four quadrant box is labeled with Firm 1 at the top and Firm 2 on the left. The top left box is labeled high price on the top and high price on the left and contains 2,4. The top right box is labeled low price on the top and high price on the left with 3,6. The bottom left box is labeled High price on the top and low price on the left with 4,2. The bottom right box is labeled Low price on the top and low price on the left with 1,5.

Question: For the above game, identify the Nash Equilibrium. Does Firm 1 have a dominant strategy? If so, what is it? Does Firm 2 have a dominant strategy? If so, what is it?

Your response:

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