18. Answer the next question based on the payoff matrix for a two-firm oligopoly where thenumbers represent the firms' respective profits given each of their pricing strategies:FIRM YO $ 800,000O $1,000,000O $1,450,000Strategies:High-priceIf both firms collude to maximize joint profits,O $1,250,000FIRM XHigh-priceX = $625,000Y = $625,000Low-price X = $275,000Y = $725,000Low PriceX = $725,000Y = $275,000X = $400,000Y = $400,000tal profits for the two firms will be:

Best response of firm X, when firm Y charges high price=low price as 725000>625000. Best response…

18. Answer the next question based on the payoff matrix for a two-firm oligopoly where the numbers represent the firms' respective profits given each of their pricing strategies: FIRM Y O $ 800,000 O $1,000,000 O $1,450,000 Strategies: High-price O $1,250,000 FIRM X High-price X = $625,000 Y = $625,000 Low-price X = $275,000 Y=$725,000 Low Price If both firms collude to maximize joint profits, the total profits for the two firms will be: X = $725,000 Y=$275,000 X = $400,000 Y = $400,000

18. Answer the next question based on the payoff matrix for a two-firm oligopoly where the numbers represent the firms' respective profits given each of their pricing strategies: FIRM Y O $ 800,000 O $1,000,000 O $1,450,000 Strategies: High-price O $1,250,000 FIRM X High-price X = $625,000 Y = $625,000 Low-price X = $275,000 Y=$725,000 Low Price If both firms collude to maximize joint profits, the total profits for the two firms will be: X = $725,000 Y=$275,000 X = $400,000 Y = $400,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A 201.