This table shows for the profits of firm a and firm b.  Answer both parts a and b please Part a) Is firm 1 using a dominant strategy? What about for Firm b? Explain why or why not for each. Part b) Does this game have a Nash equilibrium? Explain why or why not.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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This table shows for the profits of firm a and firm b. 

Answer both parts a and b please

Part a) Is firm 1 using a dominant strategy? What about for Firm b? Explain why or why not for each.

Part b) Does this game have a Nash equilibrium? Explain why or why not.

Firm b
Do Not Restrict
Restrict Output
Оuрut
Il= $0.5 billion
Firm (A
Do Not Restrict
Il= $1.3 billion
Output
I2= $0.5 billion
I2= $0.4 billion
II= $1 billion
II2 =$1 billion
II= $0.4 billion
Restrict Output
II= $1.3 billion
Transcribed Image Text:Firm b Do Not Restrict Restrict Output Оuрut Il= $0.5 billion Firm (A Do Not Restrict Il= $1.3 billion Output I2= $0.5 billion I2= $0.4 billion II= $1 billion II2 =$1 billion II= $0.4 billion Restrict Output II= $1.3 billion
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