In the game shown below, firms 1 and 2 must independently decide whether to charge high or low prices. Suppose the game is infinitely repeated. Then the "best" the firms could do in a Nash equilibrium is to earn _________ per period.
A) (0, 0)
B) (5, -5)
C) (-5, 5)
D) (10, 10)

Question

In the game shown below, firms 1 and 2 must independently decide whether to charge high or low prices.  Suppose the game is infinitely repeated. Then the "best" the firms could do in a Nash equilibrium is to earn _________ per period.
A) (0, 0) 
B) (5, -5) 
C) (-5, 5) 
D) (10, 10)

Quizplus · Accepted Answer

The Answer is D

In the Game Shown Below, Firms 1 and 2 Must