Peter and Paul own the two main firms in the peanut butter cup market and have decided to cooperate to increase their profits. The numbers represent the profits each firm will make, depending on how much both firms produce. Place the numbers into the grid to show the prisoner's dilemma the two firms will find themselves in as they try to cooperate. Peter's profits are shown in the blue triangles on the upper right and Paul's profits are shown in the green triangles on the lower left of each square in the grid. Peter's Peanut Butter Cups

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter26: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 13E
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Peter and Paul own the two main firms in the peanut butter cup market and have decided to cooperate to increase their profits.
The numbers represent the profits each firm will make, depending on how much both firms produce. Place the numbers into the
grid to show the prisoner's dilemma the two firms will find themselves in as they try to cooperate.
Peter's profits are shown in the blue triangles on the upper right and Paul's profits are shown in the green triangles on the lower
left of each square in the grid.
Paul's
Cups O'
Peanut
Butter
High
quantity
Low
quantity
Peter's Peanut Butter Cups
High quantity
2
4
II
Low quantity
II
11
7
7
Answer Bank
2
II
Transcribed Image Text:Peter and Paul own the two main firms in the peanut butter cup market and have decided to cooperate to increase their profits. The numbers represent the profits each firm will make, depending on how much both firms produce. Place the numbers into the grid to show the prisoner's dilemma the two firms will find themselves in as they try to cooperate. Peter's profits are shown in the blue triangles on the upper right and Paul's profits are shown in the green triangles on the lower left of each square in the grid. Paul's Cups O' Peanut Butter High quantity Low quantity Peter's Peanut Butter Cups High quantity 2 4 II Low quantity II 11 7 7 Answer Bank 2 II
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