Consider a market with two firms, Kellogg and Post, that sell breakfast cereals. Both companies must choose whether to charge a high price ($4.50) or a low price ($3.00) for their cereals. These price strategies, with corresponding profits, are depicted in the payoff matrix to the right. Kellogg's profits are in red and Post's are in blue. What is the cooperative equilibrium for this game?
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Consider a market with two firms, Kellogg and Post, that sell breakfast cereals. Both companies must...
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