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Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The payoff matrix that follows shows the profit (in millions of euros) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High LowFlashfone Pricing High 11, 11 2, 18 Low 18, 2 10, 10For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $10 million and Pictech will earn a profit of $3 million. (Hint: Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms.)Required:a. If Flashfone prices high, Pictech will make more profit if it chooses:b. If Pictech prices high, Flashfone will make more profit if it chooses:
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Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The payoff matrix tha...
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