Assume there are two firms X and Y, considering which of two alternative prices to charge, £25 or £19 for X and £20 or £15 for Y. The  firms make their decisions simultaneously: i.e. neither firm knows the price choice of its rival. The various profits are illustrated in the following pay-off matrix: Strategies and payoffs for X are in blue and for Y in red. (a) What is firm Y’s best response to each of the two different prices firm X could charge? Does firm Y have a dominant strategy?  (b)What is firm X’s best response to each of the different prices firm Y could charge? Does firm X have a dominant strategy?    (C) What is/are the Nash equilibrium/equilbria? What is the most likely outcome of this      game? Explain your answer.

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