Question

Consider a market with two​ firms, target and​ wal-mart, that sell cds in their music department. both stores must choose whether to charge a high price ​($3030​) or a low price ​($1313​) for the new miley cyrus cd. these price strategies with corresponding profits are depicted in the payoff matrix to the right.​ target's profits are in red and​ wal-mart's are in blue. ​target's dominant strategy is to pick a price of ​$ 1313. ​wal-mart's dominant strategy is to pick a price of ​$ 1313. what is the nash equilibrium for this​ game?
a. the nash equilibrium is for target and​ wal-mart to both choose a price of ​$3030.

b. the nash equilibrium is for target and​ wal-mart to both choose a price of ​$1313.

c. the nash equilibrium is for target to choose a price of ​$3030 and​ wal-mart to choose a price of ​$1313.

d. a nash equilibrium does not exist for this game.

e. the nash equilibrium is for target to choose a price of

Answer 1

The answer for this question is b