Samsung Expensive Cheap Apple Expensive Cheap 4,4 6,2 2,6 3,3 Apple and Samsung control the majority of the Smart Phones. Suppose the diagram above represents their strategic options, either to offer an expensive or a cheap phone in the market. If both firms offer an expensive phone, they will each earn 4 billion dollars. If Samsung offers a cheap phone, while Apple offers only an expensive phone, Samsung will earn $6 billion and Apple will earn $2 billion, and vice versa. If they both offer a cheap phone, they will each earn $3 billion. What are the profits in the Nash Equilibrium? Both firms earn $4 billion. Samsung earns $2 billion and Apple earns $6 billion. Samsung earns $6 billion and Apple earns $2 billion. Both firms earn $3 billion. оооо
Samsung Expensive Cheap Apple Expensive Cheap 4,4 6,2 2,6 3,3 Apple and Samsung control the majority of the Smart Phones. Suppose the diagram above represents their strategic options, either to offer an expensive or a cheap phone in the market. If both firms offer an expensive phone, they will each earn 4 billion dollars. If Samsung offers a cheap phone, while Apple offers only an expensive phone, Samsung will earn $6 billion and Apple will earn $2 billion, and vice versa. If they both offer a cheap phone, they will each earn $3 billion. What are the profits in the Nash Equilibrium? Both firms earn $4 billion. Samsung earns $2 billion and Apple earns $6 billion. Samsung earns $6 billion and Apple earns $2 billion. Both firms earn $3 billion. оооо
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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